Can Options Be Used as a Hedging Instrument?
Yong Sakong, Dermot J. Hayes, Arne Hallam
January 1992 [92-WP 85]
We develop a portfolio choice model for farmers faced with both price and production uncertainty who can hedge this uncertainty using both options and futures contracts. We then simulate the decision process of a typical Iowa farmer and derive his or her optimal options and futures position.
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