Chapter 34: Futures and Futures Options 681 
Note that this formula is merely another version of the one previously present­
ed in this chapter. 
In the example above, neither of the options in question had moved the 30-
point limit, which applies to soybean options as well as to soybean futures. If they 
had, they would not be useable in the formula for implying the price of the future. 
Only options that are freely trading - not limit up or down - can be used in the above 
formula. 
A more complete look at soybean futures options on the day they opened and 
stayed down the limit would reveal that some of them are not tradeable either: 
Example: Continuing the above example, August soybeans are locked limit down 30 
cents on the day. The following list shows a wider array of option prices. Any option 
that is either up or down 30 cents on the day has also reached its trading limit, and 
therefore could not be used in the process necessary to discover the implied price of 
the August futures contract. 
last Sale Net Change 
Option Price for the Day 
August 550 call 71 - 30 
August 575 call 48 30 
August 600 call 31 - 26 
August 625 call 19 - 21 
August 650 call 11 - 15 
August 675 call 6 - 10 
August 550 put 4 + 3 
August 575 put 9 + 6 
August 600 put 18 + 11 
August 625 put -----------31 + 16 
August 650 put 48 + 22 
August 675 put 67 + 30 
The deeply in-the-money calls, August 550's and August 575's, and the deeply in­
the-money August 675 puts are all at the trading limit. All other options are freely trad­
ing and could be used for the above computation of the August future's implied price. 
One may ask how the market-makers are able to create markets for the options 
when the future is not freely trading. They are pricing the options off cash quotes. 
Knowing the cash quote, they can imply the price of the future (613 in this case), and 
they can then make option markets as well.