Trading and Hedging with Agricultural Futures and Options

Today's Premier Guidebook for Understanding Agricultural Options and Making Them a Key Part of Your Trading and Risk Management Strategy Agricultural futures and options represent a vital niche in today's options trading world. 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. 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: How hedgers and traders can use options effectively with realistic expectations Methods to understand price behavior including the "Greeks" (delta, gamma, vega, and theta) The importance of volatility and little-known ways to make it work to your advantage 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.

Contents Foreword by Willard R. Sparks, CEO, Sparks Companies ix Acknowledgments xiii Disclosures xv Introduction xvii Part I The Basics of Futures and Options 1 Chapter 1 The Terminology of Futures and Options 3 Chapter 2 Diagrams of Basic Trading Strategies 20 Chapter 3 Diagrams of Basic Hedging Strategies 51 Chapter 4 Why Futures and Options Have Value 70 Chapter 5 Option Price Behavior 81 Chapter 6 Volatility 96 Chapter 7 Option Price Behavior II: The Greeks 117 Part 2 Hedging Strategies 143 Chapter 8 Strategies for Long Hedgers 145 Chapter 9 Strategies for Short Hedgers 171 Chapter 10 Advanced Hedging Strategies 195 Part 3 Trading Strategies 223 Chapter 11 Pricing and Graphing Strategies with OP-EVALF™ 225 Chapter 12 Buying Options 244 Chapter 13 Selling Options 265 Chapter 14 Vertical Spreads 283 Chapter 15 Straddles and Strangles 303 Chapter 16 Ratio Spreads 320 Chapter 17 Conclusion 334 Index 341