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| Put options are price insurance. If you think grains have topped, it's time to sell, forget options. Options are for locking in a price with the chance (and hope) of prices going up and getting a better one in the future. A 10.40 put costs 1.12 and figure a 40 cent basis - you've got a floor of 888. When you could sell cash beans at $10. There are better combos if you look for them (11.00 strike, @ 1.60 - .40 gives you a 9.00, but that is much more expensive). If you haven't sold anything yet - I'd say put 10 - 20% on a cash sale to start out with, then look at options as you approch what you have insured. | |
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explain to me using put options, please
