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NE CO | I'm starting to question my strategy of scale up selling. I thought $5.22 on Chicago wheat looked good when I started selling this year's crop on the board. My last sale at $7.40 , as well as sales all the way up seemed prudent, but I'm getting killed on margin calls. Most of the sales have been rolled out to March when I hope local basis levels have improved. I'm about 60% sold on the 2007 crop now. I still think my strategy was fairly sound, but the checkbook is sure getting pinched right now, and wife thinks I'm crazy every time the broker calls up asking for more margin. I thin I will take a break on selling until more signs of a top are evident, but who knows where that will be. Chi March was up $.20 overnight again. I suppose I'll be getting another call from the broker today.
Am I on track, or do I need to seriously reconsider my strategy. Options seem too pricey to use, although the thought of selling covered options makes some sense to me. I could sell an $8.00 Mar call for over $.50 today, and I suppose it will be higher today. If the price is up still high in March, that gives me $8.50 wheat less basis. If the price drops, I still have the 50 cent premium. | |
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House of Cards?
