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Neal: Sure, go ahead. I think other traders would be interested. |
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Don: First of all, I don't have the option prices as of when he made the trades, so I am going to imagine that he is considering shorting December meal at Friday's closing price (September 4). Therefore, I can look at some options as a possible choice. |
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December meal is $131.80. In lieu of futures, maybe buy a deep in-the-money put. The December 140 put is trading for $10.60. It is $8.20 in the money. If meal goes down, he will make $2.40 less than shorting the futures. (This is the time-value value above the amount in the money.) |
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What he has is a position that has limited risk. He does not have to initiate a stop. This gives him a better chance of having |
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