Futures Options and Their Use by Financial Intermediaries
Since the fall of 1982, futures exchanges
in the United States have been allowed to trade
options on futures contracts. These new option
contracts give the option holder the right, but
not the obligation, to buy or sell a futures contract at a specified price until a fixed future
date. Currently, 25 futures option contracts
are traded: ten agricultural contracts, five
contracts on gold and silver futures and ten
contracts on foreign currencies, debt instruments
and stock indices.