Crop Risk believes options are valuable tools in the hands of professional hedge advisors. They allow producers the ability to transfer risk in an economical manner. The buying of options is an integral part of our risk management philosophy. Option strategies recommended by Crop Risk also have the advantage of defined risk, you know on the front end the maximum potential loss. Therefore, buying options rather than selling options is our preferred strategy. Crop Risk would never advise selling uncovered options. When you sell uncovered options you are subject to margin calls. Crop Risk believes margin calls are the last thing a producer needs.

Managing risk without options, in our opinion, is unquestionably more difficult. We highly recommend that users of our service open a futures account to implement options strategies. Crop Risk can make recommendations without the use of options, however we certainly believe it is in a producer’s best interest to take advantage of the flexibility offered by the use of options. The following text should give one a basic understanding of the options strategies Crop Risk would employ.