Holding a workshop for nontraders would heighten awareness about how futures and options can be used to identify profitable opportunities. In promoting such a workshop, it would be important to emphasize that producers can benefit from knowledge of futures and options even if they do not trade them directly. A better understanding of futures and options will also benefit Extension agents when they must resolve many of the market related problems brought to them. For example, deciding what to plant is mostly a matter of determining potential prices. Using futures prices to derive a potential cash price is one of the benefits of futures and options to nontraders that is explained in the publication.
Option premiums reflect what traders feel at a moment in time about possible future price movements.
This information can be used as a guide for selecting marketing strategies and making pricing decisions. Illustrations in the publication will help nontraders benefit from this program. Most elevators offer several types of contracts, based on the futures and options markets, which can be used to manage price risk. These strategies may involve storage as well as one of a combination of two or more of the contracts listed. Numerous alternatives are illustrated in the final part of the publication.