|
Red River Valley | One of the keys to selling calls is to do it at times of High volatility ( brings in the most risk premium ) that is much harder to do when the crop is in the bin. but vs nothing I think it is a good Idea if your plan is to wait and see. Not sure I would have any Interest in selling them with the nearby trading below $4.00 but get it above that number and and you should be able to sell the July $4.50's with some value.
One thing to think about is are you willing to sell bin crop out under your calls and then let them exercise your call option ?? This will leave you with a $4.50 short position in July 16, then are you willing to except a roll to new crop and have those commitments be your new crop delivered grain. If this ending action is agreeable with you than go for it when the opportunity arises, if it is not than think about how much risk you are willing to take and act accordingly.
I have done this many times in my career and I like the results but with out a doubt it has its risk.
Edited by Tara Farms 10/31/2015 12:43
| |
|
Selling Calls against stored bushels
