Boo ya

[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?

[charliep]

I will read my stuff more carefully but I that is what I tried to say. You would buy a call to offset a deferred delivery contract. I would like to see a pull back before I bought so could spend less money. Still some pain realizing that I could have locked in a ddc at $10 ish and the market is over $12 today.

If you have growing crop that you are comfortable you will be able to harvest, then you would consider a put.

[cottonpicken]

Well I've been a good boy lately but if if catch another deleted post or two i wont be.

[charliep]

Just reading your last post over and you are suggesting to sell cash canola/use some of the proceeds to buy a call. Nothing wrong other than to note you have to like the basis and realize you are locked into a delivery with a grain company. A put can accomplish the same thing except you are not locked into a grain company contract and your basis is open.

[cottonpicken]

I'll give you the basis angle and it may be the winner.

Believe I have explained myself sancro sanc.

If I had a naked position now well the marketed moved id hold off for a few days to re assess with the techs we are close to breaking out of the stuff from 2013 but far from convinced its here and now guess what I didnt forward sell.

My point being if you did sell and have nothing to deliver what was the best option which you seem to decline an answer but heh risk management?

[checking]

I believe he clearly answered with "if you have a growing crop that you are comfortable you will be able to harvest, you would consider a put.

[charliep]

jwab

I agree. Everyone has to pick the tool that is right for them. Lots of volatility. A dip in prices followed by a period of lower volatility would help both reduce the cost of options but also attract commercials to get covered. I suspect that would be the beginning of the next leg higher.

[cottonpicken]

Omg i dont know what to say here anymore GoINPUT

[Braveheart]

jwab, if you own a put and the market moves against you before the put expires or before you sell a put to offset your position, you could be exercised and find yourself with a short futures position. You would need to margin your futures position.

[cottonpicken]

If you forward sell you are already hedged to the downside.

If you cant deliver you are still In the money if the price goes down.

If you cant deliver and short you are in trouble.

If you have puts and no crop no income it's worse.

If you have a crop and the price goes up you win.

If you have a crop and the price goes down you still have income.

To stunned to write anymore.