Wheat calls

[farmboy044]

Should a person be taking advantage of the KC wheat 510 or 520 calls for dec? I think so....that is selling the calls to collect the premium.

[TOM4CWB]

Farmboy077;

When you sell a call, it is the same as going long;

Margin accounts, on calls are required, cash flow set aside to cover if needed.

[crusher]

That is the area just above next major resistance, 4.90 on the continuation with some carry to December. To manage risk you may want to sell (offset), if the call gets exercised. You'll need to plant some wheat. I think you can do an exchange for physical with the board through a PPO. I've never tried it, but I think it would work. What are the calls trading at? Is there any volume?

[farmboy044]

Tom
selling a call is not the same as going long. it is guaranteeing that the market will not rally above my strike, and if it does, it is like being short.
I trade plenty, but by selling the call premium, especially the 520 dec KC, for 22 cents, that means the market has to rally to 542 before you loose any money, and then you have the wheat tot sell at that higher price.

[TOM4CWB]

Farmboy044;

Sorry I got the names wrong.

44, AS you said correctly, if you sell a $5.20 call, at $5.42, you have broken even minus commissions. Historically this is a good idea. Just remember the folks who did this simular trade on oil a couple of years ago ate the difference.