Financial Management

Live Cattle Futures and Options: How Have They Done?

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Abstract

Futures did reduce price risk. Hedging produced a higher minimum return and higher return at the 25th percentile (75% of the returns are better than this figure) than did the cash market. The 50th percentile, or median return, was higher for yearlings in the cash market than hedged cattle, and the calves had mixed results. Although the differences are not great, there have been months when the option strategies performed better than cash or futures, (i.e., January–April and September–October), and there are months when they did not fare well (i.e., June–August).

Keywords: ASL R1754

How to Cite:

Lawrence, J. D., (2002) “Live Cattle Futures and Options: How Have They Done?”, Iowa State University Animal Industry Report 1(1).