Establish a basis contract and protect against futures price declines
Establish both a basis contract and a futures floor price with Minimum Price Put. It protects you against a decline in futures prices while allowing you to remain in the market to benefit from potential futures price increases. Your floor price is determined by subtracting the Minimum Price Investment fee and the current basis from the futures price. You can re-price your Minimum Price Put anytime before it expires.
This contract is a great option for farmers who want to remain in the market while protecting against futures price decreases.
When is a good time to use this contract?
- When you’re satisfied with the current price, but want to know that you have some of your production sold
- When you are comfortable forward contracting a portion of your production
- When you’re worried the market will fall before you make a selling decision
- At or after harvest – to establish a basis contract and remain in the market but protect against futures price declines
What should I consider before choosing it?
- You can only re-price this contract once
- Only futures price movements will improve your contract’s value