Boo ya

[cottonpicken]

Here is a day you got to love. Dollar up grains through the roof. Blood in the water and commercials getting out while the specs take there pound of flesh?

[Hopperbin]

Interesting indeed. Tomorrow we have to watch American markets. I worry rice stocks are high and only along for the ride.

[Hopperbin]

Interesting indeed. Tomorrow we have to watch American markets. I worry rice stocks are high and only along for the ride.

[Hopperbin]

Interesting indeed. Tomorrow we have to watch American markets. I worry rice stocks are high and only along for the ride.

[Hopperbin]

Interesting indeed. Tomorrow we have to watch American markets. I worry rice stocks are high and only along for the ride.

[cottonpicken]

So is it calls or puts a guy should have owned when there is no crop to cover?

[Hopperbin]

Coulda woulda shooda, how is achieve feeling about their decisions they claim based on farmers own needs. Or any other marketeer.

[charliep]

You likely know already but you and I have a different definition of risk management.

So my answer to your question would be different. Were you long or short canola when you looking at buying the option. If long (had growing crop you expected to harvest), then buying a put would have the strategy. If you were short (had sold canola on DDC contract) and were worried about not having any canola production, then you would have bought a call to offset the potential price increases.

Strange enough, I could recommend either contract on the same. Options are tool. Not an outcome. I just ask what is causing the farmer worry/what is needed to be accomplished.

[cottonpicken]

And like I've been explaining to you its the calls that make the most sence. If your naked and forward sold a farmer has no income to support a put that goes against him as he is already on the hook. If you have the bushels you can cover with income. If your naked and short on options that is harsh.

Can somebody explain to me like i am three how this doesnt make sence. Cash flow cash flow cash flow

[cottonpicken]

Come to think of it my risk management is more prudent.

[charliep]

Not being flippant but what do you mean by naked. Just trying to highlight buying a call or a put is really spending on insurance. So the question to ask is what is your risk. Lower prices - put. Higher prices - call. Costs money so a farmer has to sort out whether the cost outweighs the benefit.

[Hopperbin]

Right now options choices would be tuff.

[charliep]

Just googled naked position.

DEFINITION of 'Naked Position'

A securities position that is not hedged from market risk. Both the potential gain and the potential risk are greater when a position is naked instead of covered (a covered position is hedged from market risk).
INVESTOPEDIA EXPLAINS 'Naked Position'

If an investor simply holds 500 shares of Ford, he or she has a naked position in Ford. If the investor wanted to cover this position, he or she could buy put option contracts, which would help protect against downward movements in the price of Ford shares.

Whether to have a naked position is rarely a concern for most small investors, but it is a concern for large investment holders and institutions.

[charliep]

If you are talking about selling/writing options, that is a different conversation.

[cottonpicken]

Wtf is going on here?

A naked position is a forward price you cant deliver against and are not hedged against.

A farmer with a forward sell of X is on the book. If the markets move against him and he can not deliver he owes Y.

If he had positioned calls he covers.

If the market had moved lower his position will be filled. With a nequotiated payout.

His downside is covered its his income that has to offset and protected.

Seriously wtf is going on here?