OPTION HEDGING STRATEGIES FOR SELLING COMMODITIES Comparing two of the put options from the previous chart: $11.80 (strike) – $.49 (premium paid) – $.25 (expected basis) = $11.06 floor selling price $11.50 (strike) – $.30 (premium paid) – $.25 (expected basis)= $10.95 floor selling price As you can see, the greater protection comes from the put option with the higher strike prices and therefore, the greatest premium.
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