| gbryce - 3/7/2024 10:07
Good Morning, I am wanting to put a value on an RP vs YP policy.
So on this particular policy I have an APH of 151. Trigger yield on 60% policy would be 90.6 bushels. Premium is 18.74 for RP and 14.34 for YP.
18.74-14.34=$4.40 difference for 90.6 bushels.
4.40/90.6=$.048 / bushel for basically a call option at $4.66 ZCZ24?
How do I determine what the current value is of that option.
I think it would be:
purchase a $4.66 call for ZCZ24 active 10/1/24-10/31/24? do calls have both a start and expiration date?
Thanks,
Greg
I think to get where you are getting the true value of the revenue side, you should get a price on the RPHPE policy and compare it to the RP price. That would give you a value to use to do your math by. Here, RP costs about double what RPHPE does, and YP is just a dollar short of RPHPE at 85% levels. So you are essentially getting the revenue side of RPHPE for free in relation to the YP policy.
Take care |
How do I determine value of CRC RP vs YP policy
