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| On an HTA you forward sell crop at a specific futures stike price, but leave the basis open. Let's say you want to sell New Crop 08 Dec corn. Let's say the futures price is $4.50, but the local basis right now is $1.00. You think that is too wide, but you think the futures price is good. So, you set the $4.50 futures price, but wait untill sometime in the future to set the basis, hoping it will come more in line with normal. Clear as mud? I did this with 07 wheat. Local basis was running well over $1, but I though the futures price was good. Wound up "rolling" new crop contracts clear to Dec to finally get a good basis. | |
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Explain an HTA to me
