#Feeder cattle futures symbol professional

A weak dollar, in particular, could signal inflation and higher feeder cattle prices. Livestock is certain to become more expensive if the world economy starts to overheat.Įasy money policies from the Federal Reserve and other central banks have kept global interest rates low and created speculation in many different asset classes.Īt some point this speculation could show up in food markets such as feeder cattle, particularly if there is a global food shortage. Trading feeder cattle is a way to hedge against the loss of purchasing power from inflation. South Korea and Russia comprise two of the top five global importers of beef.īuying feeder cattle is a bet on continued solid growth from emerging market countries.

Growth in the global economy might be the best reason to trade feeder cattle instruments.Īs emerging economies expand, their appetite for animal proteins including beef is likely to continue to increase.Īfter the United States, China and Brazil now consume the second and third most beef globally.

#Feeder cattle futures symbol professional

Please seek professional advice before making investment decisions. We present a number of common arguments for and against investing in this commodity. Important: This is not investment advice. Reasons to Trade Feeder Cattle Instrumentsīuying feeder cattle can be a great addition to a trading portfolio for the following reasons:

You should consider whether you can afford to take the high risk of losing your money. Between 74%-89% of retail investor accounts lose money when trading CFDs. While there is no ETF that specifically cover feeder cattle prices, there are three ETFs that trade in general livestock:ĬFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. These financial instruments trade as shares on exchanges in the same way that stocks do. Therefore, options traders must be right about the size and timing of the move in feeder cattle futures to profit from their trades. Options buyers pay a price known as a premium to purchase contracts.Īn options bet succeeds only if the price of feeder cattle futures rises above the strike price by an amount greater than the premium paid for the contract. However, options also have a strike price, which is the price above which the option finishes in the money. Options are also a derivative instrument that employs leverage to trade commodities.Īs with futures, options have an expiration date. The CME offers an options contract on feeder cattle futures. Trading futures requires a high level of sophistication since factors such as storage costs and interest rates affect pricing. If prices decline, traders must deposit additional margin in order to maintain their positions.Īt expiration, feeder cattle contracts are financially settled. The contract trades globally on the CME Globex electronic trading platform and has eight expiration months: January, March, April, May, August, September, October, and November.įutures are a derivative instrument through which traders make leveraged bets on commodity prices.

The Chicago Mercantile Exchange (CME) offers a futures contract that settles into 50,000 pounds (23 metric tons) of feeder cattle. Traders have several ways to get exposure to feeder cattle trading products: Feeder Cattle Futures Reasons to Trade Feeder Cattle Instruments.