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  • The Financial Encyclopedia
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Derivatives

  Derivatives   |   Terms
  • 264
  • August 1, 2022
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Commodity Option

An option to buy or sell a commodity of a futures contract on a given commodity at a fixed price and up to a specified date. The option writer sells the buyer the right to buy or sell a specific commodity at a secured price for a fixed period of time. Such options trade on a variety of commodities including oil, metals, agricultural produce (meat, coffee, grains, ..) and so on.


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