Options on Agricultural Futures: A Home Study Course |
Common terms and phrases
$3.00 strike price amount Assume at-the-money basis 20 cents basis risk Board of Trade broker buyer the right buyers and sellers cash market position cash market price cash price CBOT cent premium cents a bushel Chicago Board Clearing Corporation commodity cost declining prices effective selling price example exercise the option expire worthless forward contracting futures market futures trading gain gives the option grain harvest intrinsic value July futures price less basis 20 long futures position margin calls months November futures price offsetting open outcry option buyer option holder option premium option seller option strike price options on futures options strategies options trading out-of-the-money premi premium 30 cents premium of 30 price at expiration price change price decline price increase profit protection against lower Quiz sell your crop short futures position tion Total return tures price underlying futures contract underlying futures price value of option Writing a call