In equities for example, an option at a given strike let's you pay a little for insurance i.e. that you will have X amount of cash if SPX is at Y and so on. Th

In equities for example, an option at a given strike let's you pay a little for insurance i.e. that you will have X amount of cash if SPX is at Y and so on. This is very important for pension funds and so on because they have fixed liabilities like outflows. All these things are is a way of moving risk around. Some people want risk, some people want to hedge — it's just as true for wheat as it is for bonds. It's not so much price as risk.