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To protect against a fall in prices before you sell (East Anglia example) In November, a grower wishes to secure a minimum price for his new crop, while benefiting from any potential rise in the market.
The table below shows the grower's net price for a range of possible variations in the underlying futures price.
The opton has enabled the grower to secure a minimum net price of £67 /t, regardless of any fall in the futures (and hence physical) market.
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