Formerly NE North Dakota, now NW MN | I hate to nitpick here, but the O.P.'s average thingy doesn't really sound like a min/max plan. What a min/max plan should be, (at least this is what we were taught it would be back in the day... .who knows about new fangled stuff) would be where the merchant buys a put and sells a call for you. The put gives them downside protection, the call pays for the put but gives you an effective maximum futures price. That's not really the same as an average price dealy the O.P. was talking about.
Basically, on the average price dealy, I would ask Peter (if he's not helping his fellow Canadians build camps to house the flood of refugees they are expecting in November) if the seasonals are in your favor. If they are, yeah.... I don't know that it sounds like a really bad idea.
It'd be interesting to find out if they would still let you roll to a later month. Theoretically that wouldn't actually be that hard for them to do.
Sorry for the overuse of words like "thingy" and "dealy". The industry doesn't have a common term for time-averaging pricing mechanisms yet. |
More on HtoA, questions of my own.
