Producers – Do you fear margin calls? Are you familiar with what a margin call is and how to control them? Knowing how to handle margin can make the difference between using the board correctly and running into seemingly endless margin calls.
Hedging
Selling Options to Collect Premium
Many people are familiar with purchasing options, but few are as familiar with taking the other side of the trade by selling options. Are you familiar with how selling options can add to your trading or hedging repertoire?
Trading Sideways Markets: Selling Short Straddles
Have you ever wondered how to trade a sideways market? Selling short straddles is a way to trade a low volatility, sideways market. Read about how traders use this strategy.
Short Term Options
Producers – With news releases that come many times per year, it can be difficult to manage price risk. Have you ever looked for a better way to do it? Short term options are the answer.
Two Bullish Corn Charts in a Bearish Market
As a reader of TWIG, I hope you have come to understand my major objective to inspire ideas so you can hedge or trade these grains markets on your terms. Lately, I have been asked by producers why it would make sense to re-own. Today, I am going to step out of my bear costume and put on my bulls jersey. Maybe I can inspire an idea or two to get you involved.
The Collar: The Bread and Butter Option Strategy for Hedgers
Many believe that we are in a golden age of farming in this country. Since the summer of 2006, we have seen grain prices move in a big range, both up and down. These price fluctuations combined with below trend yields, new markets (such as China) becoming more willing buyers, and other policy factors have… Read more.
Eliminate Report Risk: Use Weekly Options to Hedge Short Term
A few months back, the CME Group launched weekly grain options for corn, wheat, and soybeans. On Sunday, September 25th, the CME Group will introduce Live Cattle and Soybean Oil/Meal weekly options. These options, short term in nature, will trade just like the monthly options that we all know. Each weekly option will have a… Read more.
Hedging by Purchasing Options: A Margin Free Way of Risk Management
Talk with any hedger and they’re sure to tell you about an experience with trading on margin. Margin is a good faith deposit that a hedger must have in their account in order to initiate a long or short futures position. For example, the margin on a corn contract is currently $2,362.00. This means that… Read more.
Hedging with Commodity Futures: It’s All About Managing Price Risk!
The goal of hedging is to transfer price risk from one party to another. Hedging has been used for hundreds of years to help producers and buyers protect themselves from price risk.