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SW MN and Gold Canyon AZ | Paul, buying a call and a put @ the same time is called a straddle. Works very well if the market moves limit up or limit down. It takes volitility to make it work . Best time to buy is about 2 weeks before a big report like the one coming March 31st. Example if you pay .50 for a put and .50 for a call lets say at the money 5$. The market goes limit down 3 days in a row. The put would increase ,the call would decrease in value. What you hope is that the put increases more than the call decreases, thus netting the difference. Now if the report is neutral and the market is quite after the report the calls and puts would both lose value and you lose money!!At least with puts and calls you know what the limit of your loses can be, futures trades you don't.
I like options becasue they allow me to sell the same grain several times ,giving me more chance to get a better price. Example would be now in the soybeans. The basis is VERY wide. This tells me don't sell cash. The carry is also very big, I can sell for July and gain a very good storage fee plus my interest costs. So Instead of selling cash now, I can buy a put for july, set a futures floor, lock in my carry and leave the basis open and actual cash price and hope that basis narrows from these historically high levels. It should if seasonal tendencies happen.
Options give you options!!
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Marketing advice, should I or shouldn't I
