On the rest of his crop that’s not Jeff Nicholas insured, he buys put options that focuses most of protect against a downturn in prices his marketing but carry no obligation to deliver. on corn, but he “I don’t buy options that many doesn’t let it over- times a year,” he says. whelm him, either. He also uses the sell signals for One advantage to timing those purchases. And he pays using sell signals the full premium on options, not is that he doesn’t using strategies to reduce premiums have to concentrate by selling out-of-the money options. on marketing every day of the year. Short-term putS work beSt Nicholas also gives So far, Nicholas has not had a put credit to his father option expire worthless, something and grandfather for many market observers would say is mentoring him on difficult to sustain every year. marketing.

that roughly covers the replacement value if he has a short crop. He normally buys revenue assurance with the harvest price option, insuring between 70% and 75% of the yield.

One key to that is he doesn’t hold the options that long.

This year, “I only held them a couple of weeks and then took profits,” he says. “I like to take profits.

Even if they are still gaining value, it is always nice to have money in the Of course, not every sale looks they say, ‘I’ve made a mistake.’ But I bank. good in the rearview mirror. disagree wholeheartedly,” he says.

“There have been a couple of If the price keeps going up, it may opportunities where on these put dealing with imperfection be an opportunity for the next year’s options, when I bought them on the Front-loaded sales made in incre- crop. Nicholas tracks his total aver-sell signal, I’ve made some pretty ments inevitably mean missing some age price for a better picture of how substantial profits,” he says. of the highest prices. he’s doing. “I look at everything I’ve

Last summer Nicholas bought “I delivered some corn this spring got sold,” he says. some of his corn puts at about $7. when it was $5.50 to $6 a bushel and “When I was delivering that corn

“I had over $1-a-bushel profit mine was $3.80,” he says. He had for $3.80, I was also selling [new in those puts when we sold them,” contracted part of his 2007 corn crop crop] corn or $7. So that makes a Nicholas recalls. at that lower price for spring 2008 pretty good average,” he says.

“We didn’t capture all of the drop delivery. “When I was selling corn at $7, in the price, but it was a good strat- “I know a lot of farmers who sell everybody said it was going higher. egy and I have no regrets. I never corn and it goes up the next day and I said, ‘That’s fine, I’ll sell some look back,” he says. more,’” he says.

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Above all, it’s important not to beat yourself up over lost opportunities, he believes.

Jeff Nicholas is also president of the Surf Ballroom & Museum, phone: 641/357-6151

“Life is too short,” he says. “If you have regrets, you’ll miss what’s coming at you.”