Markets that are linked to options prices I recently went through a serious of lectures on economics and markets, and I was surprised by the lectures on options. The lecturer, said that the future prices of certain commodities like rice (food) could be closely estimated with option prices of the present. Commodities like fuel are also closely linked, but there are problems when there is war and diplomatic issues. But for things like shares, options prices are irrelevant to the prices of the future. 

While I understand the second example, I was to surprised with the other two because no reason was given. If anything, shares are controlled by the society, and therefore, should have been easier to control compared to say food, which is susceptible to natural calamities. 

So my question is what are the characteristics of markets that could be predicted with options prices of the present?
what are the characteristics of markets that could be predicted with options prices of the present?


There aren't any. Options might be descriptive of the present, today's expectations, and of today's uncertainty; but they cannot be predictive of the future.

Putting aside the intrinsic value of in-the-money options, option prices reflect traders' expectations about the future price of the underlying asset. But expectation does not mean determination or prediction of the future. In fact, traders try to factor volatility in their valuation of options, which further weakens the notion that option prices are predictors. Volatility represents uncertainty.

Therefore, it is false that option prices predict what the future price of the underlying asset will be.

The lecturer is wrong in the distinctions he stated. Had he substantiated his rationale for the distinctions, we would be able to either follow his point or identify where exactly his argument goes astray.

What could happen is that an option or its underlying asset are under- or overvalued, thereby creating arbitrage opportunities while price adjustments take place. However, that has nothing to do with options prices predicting any future prices.


  While I understand the second example, I was to surprised with the
  other two because no reason was given. If anything, shares are
  controlled by the society, and therefore, should have been easier to
  control compared to say food, which is susceptible to natural
  calamities.


Whether an asset is controlled by either nature or society has no bearing on this matter because nature and society are not even disjoint factors, and they are not mutually exclusive factors.

Trade and production of rice are subject not only to nature calamities, but also to acts of man: strikes, increase of technology, changes in work culture, sudden news that rice cures a chronic disease, and so forth.

Conversely, the stock price of an oil company might go down as a result of nature calamities and thus be unrelated to the acts of man.