Research on market premiums on put options during the period of November, 1984, through June, 1985,showed that the market premiums conformed closely to the pricing that is implied by the Black model of option pricing. Information learned from this research was used to predict the option premiums that would have occurred at various points in the period 1973-84. This allowed an evaluation of alternative cotton pricing strategies of simple cash sale on the spot market, forward contracting, hedging using futures contracts and hedging buying put options at various levels of in or out-of-the-money over the period 1973-84. Over the 12 year period forward contracting and hedging with futures contracts, not surprisingly, would have lowered average income slightly relative to simple cash sale. The surprise was that consistent options hedging over the period 1973-84 would have raised income 4 to 9 percent over simple cash sale. Therefore, buying put options may not only provide protection from falling prices but may also raise farmers' average incomes under conditions that have occurred in the past.