Premium Plus Contract
Get a premium on a sale made today in exchange for a firm offer with a set
strike price and strike date. Get that little extra out of the market
today while starting your marketing plan with an offer.
What is a Premium Plus Contract?
The POET Premium Plus Contracts pays a per-bushel
premium on the initial quantity of Corn, when you commit
to sell a like quantity in a deferred delivery period at
a specified target price. Should the target price trigger on the market
close of the strike date, then the target offer becomes a contract
for the agreed-upon delivery period.
- Good option if you think the market is headed sideways or downward
- You choose the target price and set date
- Take your premium up front
- Potentially price future deliveries above the current market price
- If the price is below the target price on the market close at the target date, then there are no additional bushels required to be delivered and no repayment of premium
- There is a double obligation tied to this contract
- The only time the target price can be set is on the target date if the market closes at or above the set target price
- Regardless of how high the futures go, the initial target price plus/minus the local basis will be the set cash price