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swmn/soin | dpilot83
Have to agree with you here.......using your scenerio here....pricing 60% at the elevater would lock in that price. The prudent thing to do with the remaining 40% would be to buy a put to protect your downside risk. Any price increases based on your example would give you most of the upside gain on any unpriced production, without the margin calls of being short the futures. Also, anyone who has used the futures market should know that sound money management goes hand in hand with risk management.......using stop-losses. | |
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How do you price/protect 'unknown' production?
