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Accumulator double up
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Sheep Farmer
Posted 6/12/2019 05:40 (#7554430 - in reply to #7554164)
Subject: RE: Accumulator double up


Northwest Iowa
When you start an accumulator you know the risk of doubling up. Right now guys are doubling or have the potential to double up. Once again you should only have a small portion of bushels committed because of your double up potential. I have some that our on weekly doubles that we are doubling and some on euros that if they ended today they would double. I’m not complaining it was my choice and every Farmer needs to understand that and own up to the decision made to enter those contracts.

As far as protecting yourself on double ups that is a great question. Theoretically when a guy enters an accumulator contract he should probably go buy a call at the accumulation level or their abouts to protect before it gets to that level. But that kind of defeats the purpose of starting to contract, getting the premium on the accumulator, but than spending money on options potentially taking the premium from the accumulator to pay the option. I still think a guy puts 10 to 15% of production in and if you start doubling use HTA’s on other produced bushels for your sales. Ride the accumulator out and live with what happens. It always has the chance to fall out of bed and than you hear “man good thing I started that accumulator”. They are tools in the toolbox to use is what I continue to say.
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