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Feeder Cattle Futures and Options Education
Feeder cattle futures and options quick facts:
50,000 pound contract
One cent move equals $500
Many
people do not understand the difference between
feeder cattle futures
and live cattle futures contracts. Feeder Cattle refers to
the young animals that weigh from 650 pounds to 849 pounds
that are sent to feedlots for finishing into "fed" cattle,
the basis of Chicago Mercantile Exchange's (CME) Live Cattle
contracts. So the cattle are born and raised for a short
period of time in for instance Florida and then shipped to
Kansas to be fattened up for slaughter. CME added
Feeder Cattle futures
to its list of livestock products in 1971, and in 1987 the
Exchange added options on this contract.
Feeder cattle futures and options have enabled cattle
producers who use them to manage their price risk more
effectively. Over the years, the contract has continually
evolved to more effectively serve both long and short
hedgers. Today the CME's feeder
cattle future contract and the
live cattle future contract have increased their volume
considerably over the years to become two of the premiere
meat future contracts.
Feeder Cattle Futures and
Feeder Cattle Options
Contract Specifications
Trading
Unit
Feeder Cattle Futures: 50,000 lbs. of
700 to 849 lb. Medium Frame #1 and Medium and Large Frame #1
feeder steers
Feeder Cattle Options: One Feeder
Cattle Futures Contract
Live Cattle Futures: 40,000 lbs. of
55% choice, 45% select grade live steers
Live Cattle Options: One Live Cattle
Futures Contract
Trading
Hours
Feeder Cattle Futures: 9:05 a.m. -
1:00 p.m. LTD (12:00p.m.)
Options: 9:05 a.m. - 1:02 p.m. LTD
(12:00p.m.)
Trading
Months
Feeder Cattle Futures: Jan, Mar, Apr,
May, Aug, Sept, Oct, and Nov, Eight months listed at a time
Live Cattle Futures: Feb, Apr, Jun, Aug, Oct, Dec, Seven
months in the February Bi-monthly Cycle
Feeder Cattle Options: Jan, Mar, Apr,
May, Aug, Sep, Oct, Nov.
Flex Options: Eight options months
listed
Live
Cattle Options: Feb, Apr, Jun, Aug, Oct, Dec, Serial Months
Flex Options: Six months in Feb
Bi-monthly cycle. One serial month
Point
Description
Feeder Futures and Options: 1 point =
$.0001 per pound = $5.00
Live Cattle Futures and Options: 1
point = $.0001 per pound = $4.00
Minimum
Price Fluctuation
Feeder Cattle Futures and
Options-regular: 0.00025 = $12.50
Live Cattle Futures and
Options-regular: 0.00025 = $10.00
Feeder Cattle Options-cab: 0.000125 =
$6.25
Live
Cattle Options-cab: 0.000125 = $5.00
Options
Strike Prices
Feeder Cattle Options: Cents per
pound. First two months only- $0.01 intervals, $0.60, $0.61,
$062 etc. All other months- $0.02 intervals, $0.62, $0.64,
$0.66, etc.
for spot month, $0.005 intervals, $0.605, $0.610, $0.615,
etc.
Flex
Options are listed in intervals of $0.0025
Live Cattle Options: Cents per pound.
First two months only- $0.01 intervals e.g. $0.76, $0.77,
$0.78. All other months $0.02 intervals e.g. $0.76, $0.78;
Serial Options - $0.01 intervals.
Flex Options are listed in intervals of $0.0025.
Product
Code
Live Cattle Futures: LC
Feeder Cattle Futures: FC
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