Posted 4/7/2021 14:29 (#8938224 - in reply to #8938043) Subject: RE: LRP Questions
I'm pretty sure its based off of the feeder cattle futures. So say you buy insurance for 143 and the board trades higher you wouldnt receive a payment. Now say board is at 130 at the time your insurance expires you would receive a payment for the difference. I dont think cash has anything to do with it. Basically its a subsidized put option but you cant get out or move up if the board trades higher. Im most definitely not an expert on it but pretty sure its the way it works.