Theoretical basis for the commodity futures options contracts

Ali Ibrahim, Mohammad; Rabee Hadi, Maitham

	Theoretical basis for the commodity futures options contracts
THE IRAQI MAGAZINE FOR ADMINISTRATIVE SCIENCES
Article 2, Volume 6, Issue 24, 2009, Pages 42-79 PDF (0 K)
Authors
mohammad ali ibrahim; maitham rabee hadi
Abstract
That option from the viewpoint of the buyer is a contract granted by the holder the right but not the obligation to buy or sell a specified quantity of the existing basis at a fixed price known in advance "for a period of time. And point of view of the seller, the option is a contract to be the editor in which the binding" implementation if Margb option holder to the implementation of the right . Thus, the option is a contract includes the rights and obligations and implement the order and selection of the bearer. and the latter used his right only if the use was profitable, "Otherwise, it is to Aistkhaddmh. As long as the option holder can choose whether it should be the implementation of the option or not implemented, the contract form provides "a form of insurance. The options are the tools of risk management does not establish prices (such as contracts futures or futures contracts) but also protect those who buy on price movements is not favorable at the same time allow them to profit from price movements are favorable. Options and futures are the most complex "of options online, but avoid delivery problems and receipt experienced by the options instant. therefore, options futures offer additional flexibility in the management of risk price for Atofarha to Aalkhiarat immediate and Aacod futures. So seek this research is to achieve a number of goals is the most important statement of the nature and importance of these contracts and research found a number of conclusions and recommendations of the most important need meet all the requirements necessary to establish a market futures commodities in Iraq, for the opportunity to trade contracts, options futures commodities. This entails creating the investment climate is encouraging to attract international financial institutions that play an "important role" in stimulating the parliamentary activities of the market and activate the presence of international rather than "scaled and make it rebuffed the models of the narrow domestic markets, especially, "and that Iraq has a material basis (in the field of crude oil, at least) which can be adaptive to the success of such an experience.
Keywords
Basis options contracts; futures; commodities

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