Holland Merchants

Many people associate options only with speculation, however, the option concept came of a necessity of control of on risk the fluctuations of the prices in the agricultural markets. The first documentation of such use of the options occurs in Holland in 1634. Tulipas was a symbol of status between the dutch aristocracy of century XXVII e, in this time, was common, the merchants to venderem the future, to deliver a posteriori. It had, therefore, a great risk in accepting to vender to a firm price in the future without having the certainty of which would be the price that would obtain to buy of the producers. To limit this risk and to assure a profit edge, many merchants bought options of the planters. These options assured to the merchants the right, but not it obligation, to buy tulipas of the planters to a price predetermined for a specific period of time.

In other words, the maximum price for the merchants was fixed until the hour arrived to deliver the Tulipas to the aristocrats and to receive the payment. If tulipas started to cost more than the maximum price, or predetermined, the merchants who possuam the options, would demand of the planter the delivery to the maximum price agreement, having assured a profit edge. If, however, the price fell and the option died without value, the merchant still could have profit buying tulipas to a price lower later reselling with profit. These contracts of options had allowed that many merchants remained working during periods of extreme volatileness in the prices of tulipas. The important concept that it is of this small history is that the options had not been created to be the speculative instrument that many make use, but yes, to be an instrument of protection against great variations of prices. 2.4.2 Types of options are operacionalizados, in Brazil, basically two types of options: American options – an option of the American type possesss a right that can at any time be exerted to one determined price until the date of exercise.