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Grain Marketing: Using Options

James Russell and, James Hanson (1989)

Summary

This fact sheet presents terminology commonly used in trading options, and shows their applications in the grain market. It does not present methods of comparing the value of different options offered for the same contract. This subject is more complex and is beyond the scope of this fact sheet. It does not present examples in which options were not held to maturity. Predicting options premiums before maturity is also beyond the scope of this fact sheet.