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MN | I use the term "gambling" only in reference to old MWs recommendation to buy calls way out of the money. Mostly because most casino games have better odds than those 2 cent calls he likes to post about.
As to risk management, I will stand by my belief that if you are a livestock producer, you will be better off in the long run investing in storage facilities to take advantage of purchasing feedstuffs at harvest when they are historically cheaper than at other times of the year. ESPECIALLY this year.
Additionally a user of corn is not wholly protected by going long futures or calls because he or she hasn't accounted for basis moves. Which historically get stronger out of harvest. So owning the physical commodity and owning a call aren't accomplishing exactly the same thing. | |
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markwright
