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Options give the agricultural industry a flexible pricing tool to assist in price risk management.
They offer a type of insurance against adverse price moves, require no margin deposits for buyers, and allow buyers to participate in favor-able price moves. Acrobat Reader required . Acrobat Reader required . Option buyers pay option sellers a premium for the rights conveyed by the option contract. The option gives the buyer the right, but not the obligation, to take the underlying futures position, so the premium is his maximum financial liability.