American trading OPTIONs are a way to manage risk in the COMMODITY exchange. This method can be applied before maturity. The valuation of the American trading OPTION in the finite difference method is less complicated than other methods and its calculation time is relatively short, and also with increasing the sample and increasing the volatility, the parameters are not disturbed. In this research, using the mentioned method, the American OPTION for two products of wheat and rapeseed meal has been done and specified according to the data of Iran COMMODITY Exchange: A) The value of the American OPTION for wheat and rapeseed meal is very small and negligible from the binomial tree method and the finite difference method calculated using the algorithm presented in the research and coding in MATLAB software. B) The American OPTION value for wheat is higher than soybean meal for both OPTIONs. The main reason for this is the high volatility (σ, ) of the base price of wheat stocks compared to rapeseed meal. C) The result of the effect of volatility change and price change on the value of the OPTION, is in favor of volatility change. This indicates the importance of the volatility parameter in the valuation of OPTIONs. Finally, it is suggested that considering that the American OPTION is capable of applying before maturity, in the iranian stock exchange for agricultural commodities is presented as one of the tools of risk management.

In the implementation of the 3rd Five year development plan (FYDP), the constitution of agriculture COMMODITY exchange in Iran was approved by the government. The Ministry of Jihad-e Agriculture, in collaboration with Iran Stock Exchange and Agriculture Bank, has taken the first steps to commence the exchange. In this paper, first, the major problem of Iranian agriculture market are reviewed, and then the important concepts of agriculture COMMODITY exchange which can help developing the agriculture standard, marketing function, transparency of the market information, transferring the price risk and also the future and OPTION contracts are explained.    

Price risk management is one of the most important subjects for economists. In this respect, hedging is one way of adjusting and declining risk. Generally, in all the world, price of agricultural products has maney fluctuations. This is so because of the nature of its demand and supply. Therefore The price fluctuation is one of the most important reasons for establishing futures markets.To establish COMMODITY exchange, first of all, we need to know how it works, what are its characteristics, instruments and institutions, What are the operational, survaliances and legal framework of the COMMODITY exchange. In this paper, we introduce COMMODITY exchange and its characteristics .Then the instruments such as futures and forward contracts and OPTIONs will be introduced. Legal, institutional & surveliance framework of the COMMODITY exchange will be studied. Then, we introduce the entrance indices of commodities to the exchange .In the last section, we investigate the consequences of establishing COMMODITY exchange in Iran.