Are feeder cattle futures a good investment?

Trading feeder cattle futures offers portfolio diversification, a hedge against price fluctuations, the opportunity to capitalize on price trends, and leverage for potentially larger profits. However, it’s important to thoroughly research and understand the market and associated risks before trading.

How do feeder cattle futures work?

* Feeder cattle futures are cash settled, so there is no delivery unlike the live cattle futures. * To arrive at the value of the contract, simply multiply the price of feeder cattle times the size of the contract. For example, if feeder cattle are trading at a price of 1.46550, the total value of the contract is $73,275.00 (50,000 x 1.46550).

What are cattle futures?

Before taking advantage of these tools, one must understand the fundamentals of the market. There are two types of cattle futures to trade when addressing beef futures: feeder cattle and live cattle. While feeder and live cattle are related contracts, each has its own characteristics that affect supply and demand.