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SC Iowa | Yes, you would be capped on the upside at the 4.45 level....
The key price point is the Feb 5 low when Dec '10 corn futures closed at 3.87
If it breaks that level, further downside protection could be warranted.....a bear put spread using the 3.50--3.00 puts (buy the 3.50/sell the 3.00) will cost you about 14 cents for 50 cents of protection..
assuming you have a revenue based crop insurance product, the question is whether buying that additional coverage is warranted...perhaps on the bushels not covered by insurance??
ACRE comes into play at levels under 3.50 as well, so a complete analysis of the safety net is warranted.
LorenK, what say you on that subject??
Ray | |
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Question for RayJenkins
