Commodity futures and options

Jeffrey Williams

Chapter 13 in Handbook of Agricultural Economics, 2001, vol. 1, Part 2, pp 745-816 from Elsevier

Abstract: Organized exchanges have evolved methods for enforcing contracts, which allow the contracts themselves to be traded at low cost. Theorists have modeled futures contracts as tools for risk management, despite an extensive empirical literature that does not support predictions about bias in prices or speculators' behavior. Another perspective models commercial firms as using futures contracts to arbitrage, to minimize transaction costs, to substitute temporarily for merchandising contracts. Because commercial firms tie their processing and storage decisions to the constellation of futures prices, futures prices have major allocative effects, even if their forecasting power is inevitably poor.

JEL-codes: Q00 (search for similar items in EconPapers)
Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.sciencedirect.com/science/article/B7P5B ... 4d3e5d1a39a93b223a5d
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:hagchp:2-13

Access Statistics for this chapter

More chapters in Handbook of Agricultural Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().