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Cash Price

Futures Price. +. =. Basis. Forward Contract. Futures Contract. Put Options. Call Options. The Marketing Puzzle. Price. Cash Price. Kim Anderson Cooperative Extension Crop Marketing Specialist Oklahoma State University. +. Call Options. Put Options. Forward Contract. Basis.

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Cash Price

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  1. Futures Price + = Basis Forward Contract Futures Contract Put Options Call Options The Marketing Puzzle Price Cash Price Kim Anderson Cooperative Extension Crop Marketing Specialist Oklahoma State University

  2. + Call Options Put Options Forward Contract Basis Futures Contract = Price Futures Price

  3. = + Basis Forward Contract Futures Price Price Futures Contract Call Options Put Options

  4. Price Actual Dollars/Unit Received

  5. = + Basis Futures Price Price $4.10 $4.50 -$0.40

  6. Price of a Commodity Futures Contract Futures Price

  7. Basis Difference Between Two Prices

  8. = + Basis Futures Price Price $4.10 $4.50 -$0.40

  9. A Contract requiring delivery (acceptance) of a specified quantity and quality of a specified commodity during a specified period at a specified location, at a specified price. Forward Contract

  10. = + Basis Forward Contract Futures Price $4.25 $4.75 -$0.50 Price $4.25

  11. A contract requiring delivery (short/sold) or a acceptance (long/bot/buy) of a specified quantity and quality of a commodity during a specified delivery period at a specified location, at a specified futures contract price. Futures Contract

  12. = + Basis Forward Contract Futures Contract Futures Price $4.10 $4.50 -$0.40 Price $4.50

  13. A contract which gives the buyer the "right" to sell a specified Futures Contract at a specified price. Premium (value) increases as price decreases. Put Options

  14. = + Price Basis Forward Contract Futures Contract Futures Price Put Option $4.50 Buy 450 @$0.30

  15. A contract which gives the buyer the "right" to buy a specified Futures Contract at a specified price. Premium (value) increases as price increases. Call Options

  16. = + Price Basis Forward Contract Futures Contract Call Option Futures Price Put Option $4.50 Buy 450 @$0.30

  17. + Call Options Put Options Forward Contract Basis Futures Contract = Price Futures Price

  18. = + Basis Forward Contract Futures Price Price Futures Contract Call Option Put Option

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