Inside the Commodity Option Markets John W. Labuszewski 1985 Wiley & Sons

Preface

The past few years have been exciting times for the futures industryImpor- tantly, in late 1982, options on futures contracts were finally approved and began trading. Both of us worked on the development of these new products: Jeanne on the Chicago Board of Trade's option on T-bond futures contract and John on the Midwest Commodity Exchange's options on gold futures contract. While we physically wrote these contracts, many individuals provided input and molded the final products. They include various members and staff of the futures exchanges, industry experts, and staff at the CFTC. Especially impor- tant was Richard Sandor, one of the fathers of financial futures.

One slightly unnerving aspect of the work was the limited amount of litera- ture available on commodity options. We decided to try and fill this void by writing this book. We felt that there was a heterogeneous audience for such a book-from farmers to CEOs, account executives to floor brokers. Thus the book was designed with two purposes. First, this book provides a solid intro- duction to commodity options, including an in-depth discussion of option pric- ingSecond, the book can be used as a basic resource by providing details on individual option contracts, and separate analyses and examples of the major types of trading strategies.

A variety of people have helped with the ideas in this book. This includes Ramakrishnan Chandrasekar, Michael Kamradt, James Meisner, Henry Otto, and Randall Sheldon, all current or former staff members of the Chicago Board of Trade. We'd also like to thank our spouses Heidi and Rex for their support.

JOHN LABUSZEWSKI

JEANNE CAIRNS SINQUEFIELD, PH.D

Chicago

March 1985