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Description of Trading and Hedging with Agricultural Futures and Options

After a brief review of option basics, this guide delves into the different trading strategies that can be used by processors, producers, and speculators. The book relies to a great extent on concrete examples, while de-emphasizing theory and mathematical models and numerous tried-and-tested techniques for trading agricultural options. Traders learn how to evaluate practical situations as well as how to manage positions held in the agricultural options market. Among the topics included are: how to build synthetic options; the differences between hedging and synthetic strategies; understanding price behaviour before expiration; volatility, the role of delta, gamma, theta, and vega on price movement; matching strategies with forecasts and the basics of argricultural options, including various spreads.

Title Information

ISBN:

9780071365024

Pages:

400 pages

Format:

Hardback

Product Code:

13862

Publisher:

McGraw-Hill Higher Education

Published:

01/09/2001

Edition:

1st Edition

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About James B. Bittman

Jim Bittman is a staff instructor at the Options Institute, the educational arm of the Chicago Board Options Exchange. He teaches seminars on options to investors in the United States and Europe. Bittman is also on the faculty at the Illinois Institute of Technology. He holds a COM membership at the CBOT and has traded options for more than 15 years. He has written several successful books for McGraw-Hill.

Contents of Trading and Hedging with Agricultural Futures and Options

1. The Basics of Futures and Options

• The Terminology of Futures and Options
  
• Diagrams of Basic Trading Strategies
  
• Diagrams of Basic Hedging Strategies
  
• Why Futures and Options Have Value
  
• Option Price Behavior
  
• Volatility
  
• Option Price Behavior II: The Greeks
  
  2. Hedging Strategies
  
• Strategies for Long Hedgers
  
• Strategies for Short Hedgers
  
• Advanced Hedging Strategies
  
  3. Trading Strategies
  
• Pricing and Graphing Strategies with OP-EVALF
  
• Buying Options
  
• Selling Options
  
• Vertical Spreads
  
• Straddles and Strangles
  
• Ratio Spreads
  
• Conclusion