Difference between revisions of "Futures"
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Latest revision as of 10:48, 1 September 2017
This page does not constitute financial advise.
If, however, one believes that crop prices will rise, there are instruments designed to hedge against food price inflation. These are called futures contracts, and are derivatives traded much like puts and calls, betting around underlying strike prices as of a given date.
For example, if we expect crops to suffer as an early winter sets, we would be positioning ourselves NOW by buying contracts for wheat that expire 12/2017 or so.
There is a lot to this, and these trade on margin, so a little movement in underlying asset price will be reflected in LARGER variations of futures prices -- be careful!
