Derivatives,futures & options.

WHAT ARE COMMODITIES/FUTURES Today's Commodities include a much broader spectrum then the agricultural products that started it all and play a much larger role in the economy. A commodity is any item that is bought and sold on an exchange. Price is subject to supply and demand factors so risk is involved. Actually risk is what started the exchange trading of the basic agricultural products. A farmer who plants a crop, bread & …

…including the stock price, strike price, and time remaining until expiration. *A stock option contract represents 100 shares of the underlying stock. *Investors use options both to speculate and hedge risk. *Employee stock options are different from listed options because they are a contract between the company and the holder. (Employee stock options do not involve any third parties.) *The two main classifications of options are American and European. *Long term options are known as LEAPS