Futures – An agreement to buy or sell a particular commodity at a predetermined price at a specified time in the future
Options – An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset (Wheat, Canola, Cattle, the Canadian Dollar, etc) at a specific price on or before a certain date. An option, just like a stock or bond, is a type of investment.
Call Option – A call gives the holder the right to BUY at a certain price within a specific period of time. Buyers of calls hope that the asset will INCREASE before the option expires.
Put Option – A put gives the holder the right to SELL at a certain price within a specific period of time. Buyers of puts hope that the asset will DECREASE before the option expires.
Premium – The cost you pay for your option.
Strike Price – The level of protection you buy your option at.
Expiration date – The last day that your option or futures contract is valid.
At-the-money – An option is at-the-money (ATM) if the strike price is the same as the current price of the underlying asset.
Out-of-the-money – Out of the money (OTM) is a term used to describe a call option with a strike price that is higher than the market price of the underlying asset, or a put option with a strike price that is lower than the market price of the underlying asset.
In-the-money – An option is in-the-money if a CALL option's strike price is BELOW the MARKET PRICE of the underlying asset or that the strike price of a PUT option is ABOVE the MARKET PRICE of the underlying asset.
Bullish – Belief the market (or underlying asset) will INCREASE.
Bearish – Belief the market (or underlying asset) will DECREASE.
Long – Buying with the expectation the asset will INCREASE in value.
Short – Selling with the expectation the asset will DECREASE in value.