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Market: Live Cattle

Futures Opportunity: Spread: Buy Feb’21 Live Cattle (LE) @ Market / Sell Oct’20 Live Cattle (LE) on or before March 24, 2020.

Specifics…

  • Gross profit target is 200 points per spread.
  • Risk 55 points per spread.
  • Max hold time is until June 5, 2020.
  • Current margin requirement for this trade is $1,100 per spread.

[P/L example, assuming total commission & trade fees of $20 / round turn, this trade would yield a net profit of $760 per spread if the trade is liquidated at the profit target. If the trade is liquidated at the risk target, the total loss would be $260 per spread*] 

Analysis…
Fundamentally, this is a cyclical trade that has been profitable 15 of the last 15 years – As slaughter normally begins to rise toward its May/June peak, market pressures nearer contracts more than deferred; with less retail beef consumption in summer, supplies will still be heavy in autumn. Technically, the spread chart is trending upwards. This trade looks to take advantage of the current trend.

If have any questions or need assistance with this trade recommendation, please feel free to contact me directly.

If you don’t already have a futures trading account with Insignia Futures & Options, I invite you to open one today…

Best Wishes,

Joe Fallico

Principal Futures Broker
Series 3 & Series 30 Registered

Phone: 1-847-379-5000 ext. 101
Toll Free: 1-866-892-2030ext. 101

Insignia Futures & Options, Inc.

* Required disclaimer:
There is a risk of loss in futures trading.  Past performance is not necessarily indicative of future results.  Seasonal trades track historical price cycles and have the benefit of hindsight.  There is no guarantee that any seasonal trade will follow the same cycle as in previous years and as such, there is no guarantee of profit. The use of a stop loss order may not necessarily limit your loss to the intended amount.

 

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

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