Trading and Hedging with Agricultural Futures and Options takes an in-depth look at these valuable trading tools, and presents clear, proven strategies and techniques for both hedgers and traders to achieve their goals while minimizing risk.

Commodities II: Trading Agricultural Commodities

Relying on nuts-and-bolts techniques and examples as opposed to the mathematical models and theory favored by other options-trading manuals this practical, hands-on book discusses many topics, including:. For producers and processors, agricultural futures and options are necessary components for controlling costs and hedging risks.

For traders, they are proven vehicles for earning exceptional risk-adjusted profits. Whichever side of the aisle you are on, Trading and Hedging with Agricultural Futures and Options will provide you with the answers you need to effectively use these versatile tools and make them an integral part of your business. Diagrams of basic hedging and trading strategies Discussionsof volatility and advanced option pricing topics The role ofdelta, gamma, theta, and vega on price movement Strategies andscenarios to profit from both rising and falling markets Trading and Hedging with Agricultural Futures and Options will helptraders and hedgers understand how agricultural options work, howthey can be used to pursue specific hedging and trading goals, andwhat are the pros and cons of using individual techniques.

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Clear, concise, and practical, it explains every nuance of these uniqueand historically profitable instruments-and is today's mostcomprehensive, easy-to-understand resource for all traders, regardless of their goals and objectives. Markets in commodity futures and options first arose-andcontinue to exist-as tools for commodity producers and commodityprocessors to manage risk. Along the way, traders and speculatorsdiscovered their value as instruments for producing consistentlysuperior gains. For both groups, however, authoritative andunderstandable information has been difficult, if not impossible, to find.

The paper deals with the price risk management issues associated with commodities.

Agri Commodities

Using options is performed by an analysis of hedging strategies in the commodity market. The authors focus on the application of the vanilla option strategies to risk management in order to point out the advantages and disadvantages of each hedging strategy.

Based on the general expressions of selling price intervals, there are modelled various hedged scenarios of wheat. The authors look at the wheat option contracts traded on the Chicago Board of Trade.

The comparative comparison of the option hedging strategies has shown the best results for the commodity seller who hedges against a price decline. Amaitiek O. The key difference is this: buyers are holding the rights held within the option contract and sellers are offering the rights held within the option contract.

Hedging 101: hedging with agricultural options

Standard options have the same contract month as the underlying futures contract. There are also serial options or short-term options that are traded in months that do not have a futures contract. Options are traded the same way that futures contracts are traded. All buying and selling occurs through a competitive trading on the exchange. Some Basic Options Facts to Remember:. Download this complimentary booklet to learn how to integrate futures and options into effective hedging strategies.