Investing in the Futures and Options Markets is a comprehensive, introductory investing text. Presented in an easy-to-understand manner, this book is for agribusiness and agricultural economics students, or for anyone with an interest in the business and finance of agriculture. Starting with a brief history of futures markets, readers are shown how to conduct a self-appraisal and develop an investment plan. Chapters address the mechanics of trading, speculative and hedging strategies, options markets, trading options, and price analysis.
Table of Contents
GETTING STARTED: Introduction. Self-Appraisal. Developing a Plan. MECHANICS OF TRADING: The Basics. The Margin. A BRIEF HISTORY OF FUTURES MARKETS: Early Marketplace. Early U.S. Futures Marketplaces. Futures and Options Exchanges. Regulating Groups. INVESTING AS A SPECULATOR--THE BASIC: Short Term. Long Term. Spreaders. Problems. SPECULATIVE STRATEGIES: Fear and Greed. Puking. Discipline. Trading Plans. Managed Trading Systems. INVESTING AS A HEDGER--THE BASICS: Basis and Basis Changes. Types of Hedges. Computing Net Hedge Prices. HEDGING STRATEGIES: THE GRAIN AND OILSEED COMPLEX: Producers. Production Hedges. Using Target Prices. Merchandisers. Ex-Pit Transactions. Call Contracts. HEDGING STRATEGIES: THE LIVESTOCK AND MEAT COMPLEX: Producers. Production Hedges. Live Cattle. Hogs. Feeder Cattle. Beef Products. Dairy Products. Input-Packer Hedges. Merchandisers and Processors. Trade Hedges. Value-Added Hedges. Using Target Prices. To-Bid Prices. Total Hedging. Basis Aspects. Problems. HEDGING STRATEGIES: METALS AND INTERNATIONAL COMMODITIES: Hedging the Metals Complex. Spread Hedging. Economic Factors. Hedging the Petroleum Complex. Natural Gas Hedging. Basis Aspects. Economic Factors. Other International Commodities. HEDGING STRATEGIES: THE FINANCIALS: Financial Concepts. Interest/Rate Hedging. Anticipatory Hedge. Bond Hedging. Long Hedging. Short Hedging. Net Hedging. Spread Hedging. Equalizing the Hedge. Currency Hedging. Currency Concepts. Index Futures. Swaps and Other Derivatives. Other Derivatives. PRACTICAL HEDGING CONSIDERATIONS: Situational Hedging. Full Risk Hedging. Cross Hedging. Different Grades/Standards/Maturities. Matching Quantities. Minimum Risk Hedges. OPTIONs MARKETS: THE BASICS: Mechanics of Trading. Actual Versus Futures. Premiums and Strike Prices. Exercising and Retrading Options. Buying Options. Selling Options. Covered Option Writing. Selling Options Naked. Spreading. Problems. TRADING OPTIONS: Hedging. Option Hedging Considerations. Financial Requirements. Price Protection. Price Insurance. Speculating. Spreading. Problems. PRICE ANALYSIS: Fundamental Analysis. The Weighted Matrix Approach. Seasonal and Cyclic Factors. Econometrics. Technical Analysis. Mathematical Fitting. A Final Note. Problems. APPENDIX A: Recommended Readings. APPENDIX B: Recommended Internet Sites. APPENDIX C: Exchange Traded Futures and Options.