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Open in new window Introduction to Options

Craig Fincham, James Mintert, and Mark L Waller ( November, 1998 )

Summary

Options give the agricultural industry a flexible pricing tool to assist in price risk management. They offer a type of insurance against adverse price moves, require no margin deposits for buyers, and allow buyers to participate in favorable price moves. Commodity options are adaptable to a wide range of pricing situations. For example, agricultural producers can use commodity options to establish an approximate price floor, or ceiling, for their production or inputs. With today’s large price fluctuations, the financial payoff in controlling price risk and protecting profits can be substantial


Details

Organization Kansas State Cooperative Research and Extension Service
Publisher Kansas State University
Publication Date November, 1998
Publication Views 272
Material Type Written Material

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