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.
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
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.
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