Buying a Put Assume you are a com producer. It is mid-July and projections are for prices to decrease between now and this fall. You have decided you would like to buy a put to hedge the selling price for your upcoming harvest. December futures are currently trading at $5.39/bu. a. Evaluate what the marketplace is offering you right now by completing the following table (3 points): December put strike Expected selling basis premium Expected price floor ITM, ATM, or price OTM $5.20 -25 .30 $5.40 - 25 .41 $5.60 --23 .53 b. Which of these strike prices is in-the-money? c. Complete the following table to determine what your net return would be if the December futures price in November is the price shown in the left-hand column? Assume there is only intrinsic value left in the premium (i.c., there is no time value) December futures Cash price Basis Net gain or loss net selling price price on put strike) $5.00 -35 $5.40 5.05 $6.00 -.35