If we want to hedge something we either short futures contract or go long on put options. If futures cash flow is certain at maturity that is the forward rate. In put options however we either get strike price or value of the underlying asset on maturity.
If this is the case then why people should choose futures contract and not put options when hedging??
Hello,
I recommend you to read the below example attached it is explained very beautifully there…
Hedging_futures_vs_options_livestock
Thankyou