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Series

Historical Materials from University of Nebraska-Lincoln Extension

1986

Ag economics

Articles 1 - 3 of 3

Full-Text Articles in Education

G86-772 Using Options To Follow A Rising Market, Lynn H. Lutgen Jan 1986

G86-772 Using Options To Follow A Rising Market, Lynn H. Lutgen

Historical Materials from University of Nebraska-Lincoln Extension

This is number five in a series of six NebGuides on Agricultural Options. It discusses how to use the options market effectively to protect us from our own emotions.

An interesting aspect of marketing is psychological. Many people make a mental decision to market grain when a specific price is reached. However, when the market begins to trend upward and hits that imaginary price level, the farmer previously facing low prices is 1) optimistic for even higher prices, and 2) wants to obtain the highest possible price to offset losses incurred during low prices. What generally happens is 1) no ...


G86-773 How To Evaluate Grain Pricing Opportunities, Lynn H. Lutgen Jan 1986

G86-773 How To Evaluate Grain Pricing Opportunities, Lynn H. Lutgen

Historical Materials from University of Nebraska-Lincoln Extension

This is the last in a series of six NebGuides on agricultural options and discusses "homework" needed to evaluate pricing opportunities.

The market is an ever changing dynamic force. While we recognize this, we also realize that to do a good job of marketing, we must be able to evaluate our pricing opportunities. We must be able to evaluate what the market is offering quickly and efficiently. Evaluating pricing opportunities comes from time spent doing homework throughout the year. If we have done this homework, we can listen to the grain market reports (Chicago futures) on the radio and quickly ...


G86-771 Evaluating Options Vs. Futures Contracts, Lynn H. Lutgen Jan 1986

G86-771 Evaluating Options Vs. Futures Contracts, Lynn H. Lutgen

Historical Materials from University of Nebraska-Lincoln Extension

This is number four in a series of six NebGuides on agricultural options. It explains how to evaluate options vs futures contracts.

Options and futures contracts are similar. Both represent actions that occur in the future. Futures markets are contracts to either accept or deliver the actual physical commodity, while an option contract is a contract on the underlying futures contract. Options contracts give the farmer the right, but not the obligation, to buy or sell an underlying commodity. This underlying commodity is a futures contract. Due to these similarities and the fact that options are based on a futures ...