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Frequently Asked Questions

What is the primary  objective of Option Advantage?

Option Advantage is an easy-to-use, time-saving, online TOOL that allows you to enter and maintain your position in volatile commodity markets - at an affordable price. After the option is opened one has oportunities for gain. 

How do I subscribe?

First, click on "Register"  located in the upper righthand corner. Fill in name, email, and password. In the window, scroll and read through the "terms of use". Check the box below the "terms of use" window. By checking the box you agree to the "terms of use" and you can continue to register. Once completing the registration, your subscription is complete. Login to myoptionadvantage.com.     

How can Option Advantage be used?

Option Advantage is for use in marketing programs, to compliment hedging assets, or for use in your own personal strategy.

How do I use the Memorandum of Understanding?

The Memorandum of Understanding (MOU) sets forth the terms and conditions between the parties to properly utilize Option Advantage.

The parties include the producer with a marketing plan, the commodity broker who will place the orders, and the grain  merchandiser who will purchase the cash grain. 

The producer is the designated lead and is responsible for coordinating the activities of the parties named in the MOU.

The purpose of the MOU is to employ the best practices and responsibilities between parties that use Option Advantage.

The parties of the MOU agree to implement the Best Practices and procedures prescribed in the Option Advantage Tutorial.

The MOU is for one crop year up to a period of 12 months.

How can CALL and PUT options become more affordable?

Close the sold option that yields a gain. This will reduce the price of the remaining open option. During a volatile market,  the price can reverse and  then the open  option can be sold at a gain. If the market does not reverse, the cost of the remaining option is the balance of the bought premium. This balance will be less than the premium of the original bought option.

How can the subscription cost be recovered?

The cost of 5 Blend Orders at $946 can be recovered from the sale of the 5 open bought option contracts. The uncovered bought contracts from one Blend Order of 25,000 bushels with a four-cent gain could yield $1000.

How do I place the Order?

The first step of Option Advantage allows you to select your Entry Price or range with its corresponding Blend Order. You decide what works best for you.  

In the second step, access the formula tied to your selection by clicking "Get Blend Order". Enter the Blend Order CALL and PUT formula including the Cost or Credit limit price into your order-entry system or call your broker to submit the order.

When the order is filled you are in a position to take advantage of market movements with less market exposure.

How does Option Advantage reduce unlimited market exposure?

Option Advantage uses covered CALL and PUT formulas. The sold option must be closed (bought) before the bought option is closed (sold).

What value is one Blend Order formula in Option Advantage?

One Option Advantage Blend Order formula,  including the Cost or Credit price,  equals one contract  of 5,000 bushels.

 

Can one enter multiple option orders as one order?

Yes, technology is available on current order entry platforms to enter two or more option orders into one order with a combined limit price. This feature is very important when a market is volatile.  A fill at the Cost or Credit limit price from the Blend Order is most important to receive the desired Entry Prices.  

Can I use  a single Blend Order formula for more than 5,000 bushels?

Yes.  One Blend Order formula contract can be used for an unlimited number of bushels.  The following is an example of a 50,000 bushel position. One Blend Order formula contract of 5,000 bushels x quantity 10 equals a 50,000 bushel position. To place the order, submit the Blend Order formula including the Cost or Credit limit price as one order and then use a quantity of 10. When filled, this order yields a 50,000 bushel position at your Entry Price.

What is the difference between a Blend Order and a Future Blend Order?

Both Blend Orders and Future Blend Orders include CALL and PUT options. Blend Orders consist of CALL and PUT contracts without any future contracts. Future Blend Orders include at least one futures contract with CALL and PUT contracts.