So I have bought this in my IRA...Several hundred shares. I purchased it a few years back for inflation protection (super inflation). This is when Biden (and congress) were spending and printing money with no end in sight. There seems to be no end in sight with the printing of the money even now. I own stocks like BG and ADM. They are long term investments and inflation protection buys. I've had them for 15 years or so. So here are my issues. WEAT earns nothing...I have optioned it once or twice over the years. It doesn't move greatly. It moved during the Russia's invasion of Ukraine. Wheat is not like oil...It can be stored somewhat. If major ports were to go down, the product could still get to market. It could be fed to cows, pigs, goats, people, zoos, you name it. Should I consider optioning this ETF (it really is an LLP when you come down to it)? The option money is not that good...I get it!! But holding for insurance (super inflation) may be the way to go... Thoughts??
If you've held it this long, why cap the top now that it's dropped so much? I'd rather sell the Oct. 5 Put for ~.30 (Last trade price so not sure if close to current market. Jan is showing .37 so might be close.) 5.5% return for 7 months so 9.5% annually based upon current price (5.4). You'd be buying 100 shares at 4.70 with a close below 5 at expiration which is ~13% lower than the current price.
Have you looked at the Wheat futures lately? It's trading at its ALL TIME LOW. What insurance did you have in mind? Once Russian and Israeli conflicts end, it will only go down more (likely much more). WEAKLY
It's really not an investment...I have a ton of investments. It's insurance...Tell me what will happen with super inflation?? In 1923, at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper. Most Germans were taken by surprise by the financial tornado.
You made quite a few mistakes and wrong judgment. Wheat is like oil... Those things can be stored. Just that there will be storage cost. You can even store perishers like apples, oranges ... You are assuming when there is inflation, all goods and services prices will go up in tandem. Very wrong assumption. Holding for insurance (super inflation) is the wrong idea. Some commodity prices (Natural gas, corn, wheat ...) are getting cheaper and cheaper and cheaper. So don't assume it will be on the uptrend tomorrow.
So then just do covered calls...Till it gets called away?? I bought something like this, for both me and my kids... https://www.googleadservices.com/pa...ZHujp2FAxVQ2ckDHafrDrsQ9aACKAB6BAgDEBA&adurl= Is it great insight or am I a nut??!!!
Since you’re not an experienced options trader, it is better that you stay away from options. There are too many variables, not just greeks, but also slippage on bad fills. Have a look at DBC (Commodity Tracking Index), the chart looks healthier better than the wheat chart. Obviously DBC can down as well, but at least it’s an index and it provide diversifications. (DBA - Agriculture fund is already made it’s move and is over extended) Here what will happen: If you get rid of your wheat, then wheat will go to the moon. If you keep your wheat, then it will go even lower. If you’ll sell your wheat and instead buy DBC, then DBC will go down and you’ll blame me. If you don’t buy DBC, then DBC will go up and you’ll be mad at yourself.
I have not and would never consider trading the Ags because I am not a farmer. I have been in a corn field before but I barely know what I am looking at besides the ear of corn. If I grew up on a farm that would be so different. I would know so much about all the variables involved. Instead, I would just be dumb money in a business that isn't going to have great investment properties anyway. I believe the Berlin stock exchange as an index was up like 2,200% in 1923 in nominal terms. Profitable companies are going to have built in inflation protection in nominal terms anyway. In that situation, it is the bonds in your portfolio that become a huge problem. My inflation protection is SPY and QQQ along with various world index ETFs.