You expect to deliver 60,000 bushels of wheat to the market in September. Today, you hedge your position by selling futures contracts on half of your expected delivery at the final price of the day. Assume that the market price turns out to be 495*5 at the time you make your delivery in September. How much more or less would you have earned if you had not bought the futures contracts?

Wheat - 5,000 bu.: cents per bu.

Question

Wheat - 5,000 bu.: cents per bu.

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The Answer of You expect to deliver 60,000 bushels of wheat to the market in September. Today, you hedge your position by selling futures contracts on half of your expected delivery at the final price of the day. Assume that the market price turns out to be 495*5 at the time you make your delivery in September. How much more or less would you have earned if you had not bought the futures contracts?

Wheat - 5,000 bu.: cents per bu.

You Expect to Deliver 60,000 Bushels of Wheat to the Market