Futures are standardized contracts for the purchase and sale of physical commodities for future delivery. All transactions must take place on a regulated commodity futures exchange. Contracts are standardized according to quality, quantity, and delivery time period. Price for each contract is discovered through an auction-like process between buyers and sellers that occurs at the exchange the specific commodity is listed.
Maximum Quantity Allowed:
In the AgYield simulator, each game has a maximum amount of futures and options contracts that a player can hold at any given time. This limit is set by the game’s Administrator as a % of APH for each crop. When adding a new futures or options transaction you will be notified of the the maximum quantity that can be bought or sold for each contract.
Maximum Futures/Options loss:
A successful risk manager will learn to manage their farm’s profitability and also fit within their capital limitations. In the AgYield simulator, each game has a maximum amount of money that can be lost on futures/options positions. This includes all open and all closed positions. This is meant to simulate the real-world situation of capital restraints on Hedging lines of credit that many operations get through their lending institution(s). This limit is set by the game’s Administrator as a total $ amount. This amount can be seen under the game settings icon at the top of the Dashboard tab. You will be notified if your futures/options losses start to approach the game’s limit. If your futures/options losses exceed this limit AT ANY TIME your open positions will be automatically closed out at the current market price and you will no longer be allowed to enter futures/options contracts for the remainder of the game.
1 contract = 5,000 Bushels
Minimum Price Fluctuation = 1/4 of one cent per bushel ($12.50 per contract)
Maximum daily price move = 25 cents for corn and 60 cents for soybeans (set by the CME)