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Basis trading questions! 15) You had a busy day as farmers deliver and sell you grain across the scales on this balmy August day. You
Basis trading questions!
15) You had a busy day as farmers deliver and sell you grain across the scales on this balmy August day. You look at your Daily Balancing Record and notice you are long 4,000 bushels of cash corn. You have been instructed to keep your net position to within +/2,500 bushels. What futures order do you call into your broker? a) Buy 1 contract of SEP corn at the market. b) Sell 1 contract of SEP corn at the market. c) Buy 1 contract of DEC corn at the market. d) Sell 1 contract of DEC corn at the market. 16) You just got off the phone with a producer in which you bought 10,000 bushels of soybeans for October dellivery at your current new crop board price. What order do you call into your futures broker to immediately hedge this transaction? a) Buy 2 contracts of NOV soybeans at the market. b) Sell 2 contracts of NOV soybeans at the market. c) Buy 2 contracts of NOV soybeans TAS. d) Sell 2 contracts of NOV soybeans TAS. 17) It's March and you just got off the phone with livestock feeder in which you sold him 10,000 bushels of corn for October delivery at your current new crop board price. What order do you call into your futures broker to immediately hedge this transaction? a) Buy 2 contracts of MAY corn at the market. b) Sell 2 contracts of MAY corn at the market. c) Buy 2 contracts of DEC corn at the market. d) Sell 2 contracts of DEC corn TAS Step by Step Solution
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