Dairy Futures and Options Tutorial
Some Advantages of Put Options
- No margin calls
- Protects the downside and allows for taking advantage of the upside in changes
in output price
- Only use hedging if a profit can be protected; options can be used to protect
a price going even further below "break even"
- Click here if you would like to see an additional worksheet showing the use of
PUT options
Some Advantages of Call Options
- No margin calls
- Protects the upside risk of higher input costs while allows you to take
advantage of decreases in input costs
- Only use hedging if a profit can be protected; options can be used to protect
against input costs going higher than zero-profit level
- Click here if you would like to see an additional worksheet showing the use of
CALL options