|
| I have been getting a little nervous to the downside about corn. We made some nice sales this summer in that June/July rally but still have about 50% of some corn unpriced. Sold some cash corn and bought back on the board to keep my position long because I needed the cash as a majority of my corn is stored until JFM. I wanted to keep the big downside risk to a minimum and don't think Corn present fireworks above $4.00 CZ15 at the current time.
I bought a few 3.60 Dec15 puts and sold some $4.00 Dec15 calls. for about a $0.015 out of pocket cost tonight. I figured that gets me through the end of november with really cheap protection and an idea of where things are going. I know some people hate selling calls to finance puts but I have the bushels long to accompany any long margin calls I might get if for some reason we got above 4.00 and quite frankly with the bushels I have protected this way I would be happy with a 4.00 Board price as that would give me a $4.10 cash price. I also realize i am giving up .15 cents from where we are now given the drop occurs but just can't imagine it staying low through the entire winter. I could be wrong though. Hopefully this makes sense? Am I an idiot? Any other flaws people see in my reasoning? I am definitely not sensitive so if it is dumb thought process please feel free to correct me.
| |
|
Am I an Idiot?
