Preface; Contents; List of Figures; List of Tables; 1: Setting the Scene; Investing and Trading via Derivatives Contracts in Commodities; 2: Investment and Trading in Commodity Markets; The Evolution of Commodity Markets; The Meaning of Commodity Markets; Commodity Price Index; Commodity Index Fund; Cash Commodities; Call Options; Commodity Trading; Contracts in the Commodity Market; Spot Contracts; Forward Contracts; Futures Contracts; Hedges; Swaps; ETCs; OTC Commodities Derivatives; Energy; Crude Oil and Natural Gas; Others; Metals; Precious Metals; Industrial Metals Agriculture Diamonds; Other Commodity Markets; Regulatory Bodies and Policies; USA; European Union; 3: The Financial Commodity Markets; Global Commodity Markets: Price Volatility; Commodity Price Volatility; Financial Investment in Commodities; The Effect of Financial Investment; The Financial Commodity Markets; The Commodity Futures Contract; Exchange Function; Market Participants; Hedgers include:; Speculators:; Financial Integrity of the Market; Hedging with Futures and Basis; The Short Hedge; The Long Hedge; Basis: The link between Futures and Cash Prices Basis and the Short Hedge Basis and the Long Hedge; Importance of Historical Basis; Basis Table notes:; Future Hedging Strategies for Buying and Selling Commodities; Buying Futures for Protection against Rising Prices; Price Increase Scenario; Prices Decrease Scenario; Price Increase/Basis Strengthens Scenario; Selling Futures for Protection against Falling Prices; Price Increase Scenario; Price Decrease/Basis Weakens Scenario; The Basis of Ag Options; What Is an Option?; Underlying Commodity; When Do Option Rights Expire?; How Are Options Traded?; Option Pricing Intrinsic Value Calculating an Option's Intrinsic Value; Time Value; Length of Time Remaining until Expiration; Volatility of the Underlying Futures Price; Other Factors Affecting Time Value; Option Pricing Model; What Can Happen to an Option Position?; Offsetting Options; Exercising Options; Letting an Option Expire; Option Hedging Strategies for Buying Commodities; Introduction to Risk Management Strategies; Why Buy Or Sell Options?; Which Option to Buy or Sell?; The Buyers of Commodities; Strategy 1: Buying Futures; Strategy 2: Buying Call Options; Scenario 1: Price Rise Scenario 2: Price Decrease Selling Put Options; Buy a Call and Sell a Put; Comparing Commodity Purchasing Strategies; Option hedging strategies for selling commodities; Strategy 1: Selling Futures; Strategy 2: Buying Put Options; Scenario 1: Price Decline; Scenario 2: Price Increase; Strategy 3: Selling Call Options; Expected Minimum Selling Price; Strategy 4: Buy a Put and Sell a Call; Comparing Commodity Selling Strategies; Short Futures; Long Put Option; Short Call Option; Long Put and Short Call Options; Other Strategies for Selling Commodities.