Notice they are also only indicative price - you couldnt necessarily ring up and trade them at that money. Its a theoretical value, and you could bid and get an offer at £1/t more - then up to you if you buy them at the quid more or not. You would also be subject to paying brokerage if you did trade.
The last May calls I did were £5/t to the farmer I think at £142 strike, which is the cost over the ring plus £1/t commission, so not that much more than it would cost the farmer direct with a broker. For that we are paying for the options on the day, managing the futures if they want to trade in and out (including any margin calls), sorting out the paperwork, and paying the brokerage with the futures broker. Not much to charge I dont think for the service.
Could I ask you to give a very simple explaination of Futures.
How they work "on the ground"...
A farmer has 500 ton of feed wheat in his shed.........
That's nearly a tenner more than feed wheat down here with 4 feed mills and 3 export docks within an hour's haul from here
Location does make a difference! That's spot feed wheat round us!! What premium does that pay to farm over your local feed wheat price?
Assuming you are a merchant or group ? When you do an option deal who owns the option ? Ie is it in the farmers own name ?
Prices I’ve posted are (subject to timing and moving market hence it say indicative) reflective of what I would pay as a farmer with that broker today