Commodity options provide a right over a commodity benchmark for a limited period. A call can benefit from rising prices; a put can benefit from falling prices. The buyer pays a premium, which can be lost in full. Start with a commodity below for a worked call and put example, its chart and links to market background.
Start with the underlying contract
Many commodity options reference futures. Contract sizes, currencies and quotation units differ: a price per barrel, pound or tonne is not the total option cost. Each lesson names its example benchmark and works out the premium for one contract.
At expiration, a call needs a price above strike plus premium to make a net profit; a put needs a price below strike minus premium, before fees. Before expiration, time remaining and implied volatility also affect resale value.
Metals
Energy
Grains and oilseeds
Soft commodities
Livestock
Historical contracts
Pork Bellies Options explains a discontinued contract. It is retained as a historical lesson, not listed as a current trading choice.
