Call options: a smarter alternative to storing grain
Control over pricing of grain has been an issue grain growers have grappled with since deregulation. Many have tried to gain some level of control by holding grain and deciding post-harvest when to sell and who to sell to. But holding and storing grain can be costly, risky and also not the only way to exercise greater control over pricing over time. A similar opportunity to participate in a rising market can be created through the use of financial derivative products, such as call options. How and why would a grower choose to use call options?
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@TEMarkets As you know from a decision-making view, deciles have limited value in isolation as the range within deciles can be extreme eg drought you sell @ dec10 & miss another $100t. Overlaying with deciles based on relative value paints a clearer pic eg Aus currently ~dec1 basis US futs