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SimpleHedge Spotlight: Our Latest Podcast Feature!
SimpleHedge's Co-founder, Evan, was recently featured on the What The Future Podcast!
In this episode, Evan dives deep into the world of hedging for farmers, sharing insights on how SimpleHedge is transforming risk management for the agriculture industry. He discusses the importance of protecting profits in volatile markets, explains the challenges farmers face with traditional trading tools, and highlights how SimpleHedge was built specifically to meet their unique needs.
SimpleHedge Education
What are puts & calls?
What is a marketing plan?
How To Avoid Margin Calls
Navigating commodity markets can be overwhelming, especially if you haven’t used your ag economics skills in a while. That’s where SimpleHedge comes in—to make the process simpler, faster, and tailored to your needs.
Let me tell you about a Saskatchewan farmer, who was in a similar situation.
Case Study:
Challenge: He had never hedged with options or futures before, but had heard his neighbours using them. Like many farmers, he had gone to seminars and heard generic advice that never really fit their specific needs. He felt unsure about how to protect their farm from market fluctuations.
Solution: Using SimpleHedge, he was able to quickly create his account and set up personalized hedging strategies that made sense for his family’s farm.
Result: Within just a few weeks, they had bought a put above their cost of production which resulted in an additional $52,400 that they wouldn’t have otherwise had.
See How Farmers Are Succeeding With Hedging & SimpleHedge
Old Way Vs New Way Of Hedging
If you’ve been trading futures for a while, you’re probably familiar with the old way of doing things. Phone calls, paperwork, and most accountant statements that are annoying to read. It worked, but you didn’t always know where your money was.
But now, there’s a better way. SimpleHedge makes futures trading easy and transparent. Let’s compare the two:
The Old Way:
Lack of visibility: account statements that are difficult to read, market updates over text with no price history.
Limited access: you were waiting for callbacks and updates at the end of the day.
Stressful: keeping track of market movements while juggling everything else on the farm.
The New Way with SimpleHedge:
Real-time data: get live market updates directly on your phone, allowing you to act quickly when you see an opportunity.
Track everything: see your open positions in real-time, from anywhere, giving you full control to take profits.
Less stress: manage your trades, protect your profits, and always know where you stand with minimal effort.
What are Put & Call Options?
Imagine having the power to profit on the future direction of a commodity—whether it skyrockets or plummets—without ever dealing with the physical grain. That's exactly what put and call options allow you to do. But how do they work? And why can they be such powerful tools in your marketing strategy?
What is a put?
A put is the right to sell a future contract at a certain price - if the price of the future goes down the value of your put goes up. Puts do not require any physical grain sale. You can use puts to protect yourself from price drops, without committing to a physical sale as you do with a forward contract.
What is a call?
A call is the right to buy at a certain price - meaning that if the price of the future goes up the value of the call goes up. Imagine you sold your grain and want to get back in the market…. you can buy a call … You will buy a call because you want to remain in the market when you have already sold your physical grain to the elevator. You are bullish on the market and want to keep your upside.
How To Hedge Your Crops Without Contracting With A Grain Elevator
The advantage of hedging directly in the commodity market means you have increased flexibility to get in and out of positions as you please.
Halfway through the growing season and your bias changes because of a sudden macroeconomic event? Take action and change your positioning easily and quickly. Not having your financial hedges linked to your physical contracts means you can get in an out of positions quickly.
Hedging directly with the commodity market also keeps your options open if where you can sell your grain. If you have multiple elevators within selling distance of your farm - you can receive very different prices depending on their urgency and near term requirements.
