USA | thunderhut - 11/27/2022 08:41
Your put is not “protected” if you already sold the wheat via hta.
With a traditional hta the futures price is set.
If your hta broker did a bridge strategy to keep some price open you were charged for buying a put and call already.
Selling a put or call against unpriced grain in storage is a good tool to add value but has risks too.
Pretty simple Hta is a short futures position, a sold Put becomes a long position if expires in the money. Same principle as selling futures and puts in your own futures account.
Sell Dec wheat futures @ 9, Sell Dec $8 wheat calls @ 30 cents. You will have 30 cents added to your account minus comm. So using round numbers your futures account wheat is now worth $9.30 bu. If @ option expiration Dec puts expire in the money the put turns into a long Dec futures position and cancels the short $9 Dec futures = $1.30 per bu profit.
Edited by coup 11/27/2022 09:58
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Ways to improve selling price in a down -sideways market.
