| |
|
|
Live Cattle Futures and Options Education
Live cattle futures and options quick facts:
Many
people often ask, what is the difference between
feeder cattle and live cattle.
Live cattle reflects the total current supply and demand for
fed cattle, competing meats and feed grains along with long
term cyclical patterns for meat supply and demand. The
Chicago Mercantile Exchange (CME) broke the mold of
traditional futures markets, in the mid-1960's by
introducing a futures contract on a non-storable commodity -
live cattle. The Live Cattle
futures contract has undergone
significant changes. Each of these changes has enhanced the
usefulness of the live cattle futures and options contract
in various risk management programs implemented by livestock
producers and consumers to help them hedge price risk
exposure.
These tools have enabled cattle producers who use them to
manage their risk more effectively. CME continues to work
with the cattle industry to meet producers' changing needs
by improving these live cattle futures contracts. Today the
live cattle future
contract and the feeder cattle future contracts have
increased their trading volumes considerably to become two
of the premiere contracts in the meat future sector.
Live Cattle Futures and Live
Cattle Options
Contract Specifications
Trading
Unit
Live Cattle Futures: 40,000 lbs. of
55% choice, 45% select grade live steers
Live Cattle Options: One Live Cattle
Futures Contract
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
Trading
Hours
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
Live Cattle Futures: Feb, Apr, Jun,
Aug, Oct, Dec, Seven months in the February Bi-monthly Cycle
Feeder Cattle Futures: Jan, Mar, Apr,
May, Aug, Sept, Oct, and Nov, Eight months listed at a time
Live Cattle Options: Feb, Apr, Jun, Aug, Oct, Dec, Serial
Months
Flex Options: Six months in Feb Bi-monthly cycle. One
serial month
Feeder Cattle Options: Jan, Mar, Apr,
May, Aug, Sep, Oct, Nov.
Flex Options: Eight options months
listed
Point
Description
Live Cattle Futures and Options: 1
point = $.0001 per pound = $4.00
Feeder Futures and Options: 1 point =
$.0001 per pound = $5.00
Minimum
Price Fluctuation
Live Cattle Futures and
Options-regular: 0.00025 = $10.00
Feeder Cattle Futures and
Options-regular: 0.00025 = $12.50
Live Cattle Options-cab: 0.000125 =
$5.00
Feeder
Cattle Options-cab: 0.000125 = $6.25
Options
Strike Prices
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.
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
Product
Code
Live Cattle Futures: LC
Feeder Cattle Futures: FC
|
|
