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An apple farmer produces one million pounds of apples annually, but struggles with fluctuating prices. Sometimes selling at over $0.30 per pound brings high profits, while drops to $0.10 result in losses. A pie chain specializing in apple pies faces similar challenges, running a loss when apple prices are high and thriving when prices are low. Both parties dislike this unpredictability and fear financial ruin. To mitigate risk, they can consider options before the harvest to protect against price fluctuations and ensure stability.