Heil Harvesting, Ulysses KS/Limon CO | that 4$ put it going to cost you 9 cents as of close Friday--not much money, Not a bad option, but that is a floor quite a ways out of the money. 9buck thirty.
For that dime a guy could go out and buy a 5 put and sell a 640 call, have an effective floor at 490 and a ceiling at 630. Now that being said if corn does reach 640 (who knows its not even in the ground yet) you would be issued a short futures position and have to put up margin, but as with any true hedge, what you lose in the futures you gain in the cash market, so there is no true loss and you sold corn for the 640 (less option cost less basis of course).
Either way some form of price protection is good. o-u-t |
Would you buy puts?
