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Ontario's middle east | He is saying if you have short positions (hedges) in Dec (I'm just talking corn for illustration) that you should roll those to July to capture the carry now. A benefit from doing that is if the market starts to run up in 2012 style, the spec money all rushes to the front months, smashing the carry in the process and you get to margin the extra run up if you stayed in the Dec. In 2012 the z-n went from 25c carry to a 25c inversion in like a week, so not small potatoes in that situation. Do I agree with the strategy? Absolutely. Right now for 18c carry??? Meh ..... I'll look for another nickle. I don't see much threat to carry with no crop in the ground and someone has to hold an azz load of old crop into new crop. | |
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Hedging help for a newbie, prob will take some patience!
