Our new Matrix Review blog was developed to show producers how Silveus Financial and our nCompassTM software helps producers visualize risk and scenario plan.  We will show hypothetical examples based on real risk management strategies we have developed with our clients.

A hypothetical corn farmer has already made cash sales on 50% of his expected production. The other half of his upcoming crop is still vulnerable to prices going lower. Looking to take advantage of the recent 20 cent rally in the December corn contract, the farmer decides to invest 5 cents a bushel in a 3.30 put option against his remaining production, essentially locking in a sale price of $3.25.

Standard Matrix: Note the current profitability of $88 an acre slips to a $42 profit if futures prices break from $3.46 to $3.06.

The matrix + test: Note the improved profitability below $3.26

The trade itself: Buying 38 CZ16 3.30 puts at 4.5 cents.

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