In a van, down by the river... | I've been studying the concept of writing covered calls (i.e. selling a call against your crop), and the strategy always seemed flawed until it was demonstrated to me how you could sell short-dated calls that expire near your anticipated date for making sales. The premium is less than selling a DEC, but it always seems that short-dated options are expensive relative to the time and intrinsic value. Since the short-dated option expires during the time window when you would expect to make sales, you are less likely to miss selling opportunities out of the obligation to hold more bushels un-priced to back up your short call. |
In the seemingly rare case someone wanted to talk ideas...
