|
SW MN and Gold Canyon AZ | You could also use minimum price contracts. Poet has them for corn.
As for options I like to use nearby's to hedge even out futher. My stragety is pretty complicated, but I don't like to pay time value if I can help it. Using options with resistance areas, rsi's , old tops ect.. help make them more successfull. Options are not for everyone. You have to think out each one and ask yourself "if the market goes down or up from here what is my next move" Also ask yourself why am I buying this option what is its purpose..
If I buy a put and the market goes up I can't second guess myself, but think it was a good sale and my cash price is going up in value. One can always put a stop on it and if it clears the initial sale price get out.
Its another tool in the tool box that you might use or might not depending on the situation.
Lets look at corn if dec corn gets close to 8$ the old high one could buy at the money puts there. Set the stop above that incase that isn't the high of the yr. noone knows where the top is but old highs are good bet areas to floor something.
To me in these big upmoves there is no carry (will develop later) and a wide basis. By using puts I capture a floor price allowing me to sell the carry,spreads and basis at a later date. Flexability in volitility.
I also don't have to deliver on a put option
Do I use options all the time ...no
Can you lose money on options ..yes | |
|
|
MT, would you sell '13 corn today?
