However, many others have never used them. If you are among those who haven't used them, you're missing out on a useful price protection tool. Using options can provide price insurance, market flexibility and avoid some of the pitfalls associated with cash contracts or futures hedges. Buying an option can be like buying insurance. This can be a useful tool to avoid missing higher prices after you've forward contracted cash grain or have already delivered and sold cash grain.
Options can be a critical part of risk management and marketing strategies.
Large crops, record use, somewhat tighter world grain supplies and uncertain weather will likely produce considerable price risk in 2001. If you're not comfortable with options take time to learn more about them. If you're not using them, you probably should be.