Futuros y opciones sobre futuros

  • Risk management in agricultural enterprises: price hedging

Coverage concept

Take in the futures market on the opposite option available. For example, sows purchased, then you must sell.
Therefore, future sales may:
  • Anticipate profit margins.
  • Improve marketing plans.
  • Reduce storage costs.

Marketing Strategies

  • Maximum Gain is an aspiration but improbable achievement. “El peligro del angurriento es morir empachado”.
  • Optimal Gain is in the balance between risk and opportunity. The first obligation of the producer is to capture profitability. You should think about the sustainability of the company above personal aspirations to ‘paste the crash “because the latter is unlikely and carries a great deal of risk.


Today in our country the producer has 3 large grain market options: sell directly when the crop is up, agree a price with an exporter upon delivery or finally operate in the Chicago market.

Sales contract with exporter (selling Forward)

It is a contract exporter canceled only with the delivery of the goods, you can not change prices or quantities to be delivered. No place through the institutional environment that gives guarantees.

Advantages: no upfront costs, you can fix the selling price.

Disadvantages: there is a physical delivery commitment is not marketable, non-delivery of the product leads to penalties.

Operations in the Chicago market – Chicago Board of Trade

This market is located in the city of Chicago – USA and is the reference for global grain trade. Serves be an institutional environment that provides assurance of compliance with what is marketed through the same. The operations can be performed on it are:

Futures Contract

Commitment to deliver or receive a product where the quantity and quality specified and the place and date certain delivery. Ultimately, all the contract terms are standardized and established in advance, except the price. This contract is canceled either through a settlement – offsetting purchases or sales – or the delivery of the physical product. Compensation is the most commonly used method. In turn, purchases and sales are offset.

Advantages: To fix the selling price of the raw material in advance but need not deliver the physical. It is marketable in the market, you may cancel at any time.

Disadvantages: You must make a security deposit, plus gains and losses are adjusted daily and should make differences if they arise, which has a financial requirement.

  • Fixed price sale today (I sell a futures contract), then buy the same contract on the market prior to maturity, then my commitment is canceled. When performing the opposite operation is only the difference between the sale price and purchase. In turn, the physical commercialized with local operators. Then with the difference made in the future market, plus the price of the local sale of physical gives me the price fixed at the start.
  • Buy 185 futures contract, the market goes down to 170, balance: I win 15.
  • Buy local physical operator market price: 170 + 15 wins in the future market. Balance: I get my merchandise 185, which was the price that had been set.

Options on futures contract

An option is a contract through which the right is acquired or gave the opportunity to buy / sell a Futures Contract. These are standardized quantity, quality, price and expiration date, all but the premium. The premium price is set by the market, and has two components, intrinsic value (value of the option at the expiration date) and extrinsic (time, volatility and interest rate). It takes place in an institutional environment that provides guarantees. Options can be PUT or CALL.

 PUT buyer gets a low price protection without giving up the possible upload it. The buyer of a PUT has the right to sell their product at a set price until a certain date, while has the duty to pay a premium to the provider of any such right.


  • I am soybean producer and want to set a floor to my production. Soybean buy a PUT to 490, a margin of 20.
  • A sale date soybeans worth 400, I charge 490 minus 20 bonus.
  • If soy is at 550 I do not use my 550 PUT and charging less 20 bonus.
CALL: the buyer of protection obtained CALL upload market without sacrificing the low of it. The buyer of a call has the right to buy a product at a price predetermined price until a certain date, while has the duty to pay a premium to who gives you that right.


  • I have a feedlot, so I’m interested in fixing a maximum price (ceiling) I use corn as an input. Buy a CALL Corn 230 at a premium of 20.
  • At the date of purchase corn on the market is 270, use the CALL and my price is 230 + 20 bonus: 250.
  • If the price of corn on the market is 180, do not use my CALL and I buy in the market at 180, but my final price will be 200 because I have 20 premium.
Besides buying a PUT or CALL can sell them, and charge a premium, but in return the seller should deal with it obligations if prices drop.

Another aspect to consider is that you can make different combinations using the various contracts to achieve cheaper coverage, reduce the contribution of differences, etc.

Here we focus on PUTS because understanding this tool you can extrapolate the same reasoning to understand CALLS.


It is a futures option that gives the buyer the right – not the obligation – to hold a futures contract to sell grain for a given position at a price chosen.

The buyer obtains Put downside protection without sacrificing price hikes potential thereof.

The seller of the Put to collect the premium assumes the obligation to buy a futures contract, provided that the buyer exercise the right acquired.

Analogy with a car insurance
  • The policyholder pays a premium car, so you get the right (not the obligation) to use the insurance in case of accident.
  • On the other hand, the insurance company collects the premium and assumes the obligation to pay the settlement using the insurance if an accident is made.
Obviously the ideal thing for them is that not the accident.

How do I get no obligations to the Chicago market?
  • Let it expire.
  • Moving to the futures market (use).
  • Sell.

Interesting facts
  • Chicago Unit: Cent per bushel dollar.
  • Conversion cents/Bushel a U$S/Ton:
    • Wheat and Soybeans: divide by 2.7216.
    • Corn: divide by 2.5401.
  • Contract volumes in the Chicago market:
    • Soybeans and Wheat: 136 tt.
    • Corn: 127 tt.
  • Requirements to open current account to operate in Chicago:
    • Name
    • RUT
    • Identity Card
    • Street address
    • Area