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swmn/soin | For me personally....I have done things both ways. But right now with new crop beans over $9.60+, I have started forward contracting my 2010 beans. When you buy a put, it gives you the right to be short from your strike price. So now with the $9.00 Nov put trading at about 48 cents, the futures would have to be trading under the 8.52 area before you realize an advantage. Remember there is a lot of time decay by going that far out. For myself, I know I am getting the 9.60 no matter where the futures go. For me at the 9.60-9.75 area for cash.....I am making a profit and thats why we are in this business.
Also as a side note here......if the dollar has indeed bottomed out, then I feel the grains may have topped or are very near one.......but it`s just my opinion. Hope this helps! | |
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explain to me using put options, please
