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| roughly you are correct--
but it goes deeper, are you going to do any forward marketing? are you okay to have a low yeild and high price, but not get an insurance claim?
How much would it cost to buy call options on the same 144 bushel, so you would get a claim if the price goes higher due to a crop problem. Just shooting from the hip, but GRIP 90/100 w/out HRO is ~$53 and the HRO is an extra~$12, that is a pretty small price to pay to make sure this year is the best you have ever had. If you don't like spending the $12 extra, then back the 100% price coverage down to ~80%, spend the same $53 and get the HRO. | |
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Buying GRIP instead of puts
