G85-770 An Introduction to Grain Options On Futures Contracts

This publication, the third of six NebGuides on agricultural grain options, explains how to use futures options as a marketing tool. A new agricultural marketing tool is available to farmers. A futures agricultural option is much like an insurance policy. It is a marketing alternative that gives farmers insurance against unfavorable price moves, but allows producers to take advantage of favorable price moves. To better understand terms used in this paper, please see NebGuide G85-768, Basic Terminology For Understanding Grain Options