|
NeMO | Basis contracts have their advantages. The main one other than to take advantage of a good basis is that most places will advance 70-80% of your money upon delivery. So producer can capture basis without setting futures. As you probably know usually when the futures rally basis will drop. So if things work out you can capture good basis and the lock in better futures later.
The current problem is that too many producers did this hoping for a futures rally. And the "market" figured it out and tried to inflict pain on them | |
|