Transactions very similar to options and futures contracts today have existed in commodity markets for hundreds of years. There was an astounding Dutch tulip bulb mania in the 17th century. As tulips became more and more fashionable, people bought tulips several months in advance of the harvest. As the price went up, the contracts at the old prices were more valuable and could be sold to other people without waiting to take delivery at harvest time. In the end, the government had to step in when more tulips had been bought than were actually in the ground and several people made large losses.
KeywordsSugar Europe Volatility Hedging
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