Options on Commodity Futures

An option contract is a legally binding agreement that gives the option buyer the right, but not the obligation, to either buy (Call Option) or sell (Put Option) an underlying commodity at a fixed price on a future date. Buyers of options pay a non-refundable premium to obtain this right. Note

Benefits

• Investors can choose whether they want to exercise the right to buy/sell the futures contract on the underlying commodity
• There is no obligation to enter into the futures contract
• The maximum exposure for the buyer is the option premium, unlike futures contracts which has unlimited exposure
• An option gives farmers the ability to have a floor price for their product through put options
• An option gives millers the ability to set a ceiling price for the milling requirements through a call option
• Refer to the relevant future's benefits on our product pages.Click here to go to the futures product pages. 

Who should use this product?

• At expiration, options that are in the money will be automatically exercised by the JSE
• As per the relevant futures contract. Click here to go to the futures product pages.

How to use this product?

• As per the relevant futures contract. Click here to go to the futures product pages.