Farmer Brown purchased DEC put options for 30,000 bu. new crop corn the previous spring...
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Farmer Brown purchased DEC put options for 30,000 bu. new crop corn the previous spring with a strike price of $4.49 per bushel at a premium of $.35 per bushel. At harvest, the DEC futures have dropped to $3.25 per bushel local cash is $3.00/bu. In this case, the premium value of the $4.49 put at harvest should be at least per bushel. Which choice would be the best option for Farmer Brown (let it expire; exercise it; sell it)
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Farmer Brown purchased DEC put options for 30,000 bu. new crop corn the previous spring with a strike price of $4.49 per bushel at a premium of $.35 per bushel. At harvest, the DEC futures have dropped to $3.25 per bushel local cash is $3.00/bu. In this case, the premium value of the $4.49 put at harvest should be at least per bushel. Which choice would be the best option for Farmer Brown (let it expire; exercise it; sell it) 