Roll over vs reversal

Discussion in 'Commodity Futures' started by amsterdam, Jan 10, 2014.

  1. So your a crushing plant, and you are short the board crush margin.

    If you don't anticipate to crush and need to either reverse your position or roll over to future expiry months, how would the cost differ?

    When you roll-over your essentially reversing your position?

    If this is correct, then you would reverse your strategy and whatever level you re-enter the mkt doesn't really matter...i mean its not a cost, correct?

    Say your a farmer of corn and you can sell it to the mkt at 5 now or 4.5 on a future month, then your not actually incurring a 50cent loss...you'll just make a little less money, but you wouldn't see it or book it as a loss?

    Am i wrong in my thinking?