Posted 5/22/2020 07:56 (#8272970 - in reply to #8272819) Subject: RE: Been looking live cattle.
western iowa,by Denison
$1.00 CALL YESTERDAY WAS $5.87 or $2350 a contract-we always try to buy 2 contracts for every 40 head on the fats-the puts are crazy high-to the point that if you are wanting to protect cattle its going to cost around $100 for break evens-that the puts would deduct from that breakeven
with $120 cash I wonder if buying $1.10 calls are ok-I bought 1 of them just in case-my 1.10 puts on Oct are gone-we bought them early for $2 and sold them at $17
Maybe buy corn calls as a hedge against your fat cattle
I wonder what Stacy would do? He was very good at building a fence around cattle with options.
Keep in mind the options are expensive right now in all livestock-the corn options seem to be undervalued