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???options/puts on feeder cattle???
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<blockquote data-quote="cross_7" data-source="post: 980465" data-attributes="member: 8382"><p>What I know won't fill a thimble</p><p>I'll give you what I got</p><p>You don't have to own any cattle for an option or a put</p><p>With an option is like any commodity trading and if the value of the cattle drops(futures market) you get a margin call and will need to write a check for the difference</p><p>When the option matures(?) you buy a contract to fill the contract you sold.</p><p>Cattle go up you make money on the real cattle and lose on the paper cattle</p><p>Cattle go down you lose on real cattle but make it up on the paper cattle.</p><p>basically insurance</p><p></p><p>A put on the other hand is like an insurance policy, seems like around 3000.00 for a put but there are no margin calls.</p><p>If the cattle drop more than the 3000.00 you paid for the put then you exercise the option, if cattle prices hold or go up then you consider the 3000.00 the cost of doing business or an insurance premium</p></blockquote><p></p>
[QUOTE="cross_7, post: 980465, member: 8382"] What I know won't fill a thimble I'll give you what I got You don't have to own any cattle for an option or a put With an option is like any commodity trading and if the value of the cattle drops(futures market) you get a margin call and will need to write a check for the difference When the option matures(?) you buy a contract to fill the contract you sold. Cattle go up you make money on the real cattle and lose on the paper cattle Cattle go down you lose on real cattle but make it up on the paper cattle. basically insurance A put on the other hand is like an insurance policy, seems like around 3000.00 for a put but there are no margin calls. If the cattle drop more than the 3000.00 you paid for the put then you exercise the option, if cattle prices hold or go up then you consider the 3000.00 the cost of doing business or an insurance premium [/QUOTE]
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???options/puts on feeder cattle???
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