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Non-Cattle Specific Topics
Every Thing Else Board
Idea on when to sell
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<blockquote data-quote="HerefordSire" data-source="post: 668050" data-attributes="member: 4437"><p><em>I don't know how many head you need to sell, but it is possible to buy a feeder cattle put contract as insurance. This would make you covered instead of naked. The breakeven is the cattle cost plus the premium. This could pay if the market moves greater than your breakeven before the contract expires. If the market moves against you, you are locked in to your cost plus the premium which would limit your loss. The premium agreed upon would be dependent upon the contract strike price and expiration. Limited risk, and unlimited profit is what this strategy amounts to.</em></p></blockquote><p></p>
[QUOTE="HerefordSire, post: 668050, member: 4437"] [i]I don't know how many head you need to sell, but it is possible to buy a feeder cattle put contract as insurance. This would make you covered instead of naked. The breakeven is the cattle cost plus the premium. This could pay if the market moves greater than your breakeven before the contract expires. If the market moves against you, you are locked in to your cost plus the premium which would limit your loss. The premium agreed upon would be dependent upon the contract strike price and expiration. Limited risk, and unlimited profit is what this strategy amounts to.[/i] [/QUOTE]
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Idea on when to sell
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