Back to School With Marketing Guru Ed Usset #33: Cross-hedging

 

In an earlier “Back to School” segment, we worked through the math of calculating your minimum price when you choose to buy put options. Let’s assume that you do it – you buy 920 November soybean puts (the right to sell) in the spring to set a minimum price on your soybean production in the fall. Between now and harvest, which way would you like to see prices trend?