Introduction to Put Options, what they are, how they work and how they can used for risk management.

Put options act as insurance for falling grain prices, providing a seller with protection from falling grain prices without selling physical grain.

A put option can help create a dynamic grain marketing strategy that allows the user to minimise downside risk without committing physical grain whilst remaining exposed to higher prices.

The key components of a put option which the course covers:

The Premium: amount paid for the option.
Strike Price: the price at which the option buyer has the right to sell at.
Expiry: the date the option expires.

How to use a put option as part of a marketing strategy.