Pure Hedge – Livestock

Bill AllenGeneral Commentary

10/21/23

The meats were all lower on Friday, and had a big slide down for the week. December’23 live cattle were down 0.675 on Friday and settled at 184.625, down 2.125 for the week. November’23 feeder cattle were down 2.275 Friday and settled at 242.225, down 9.350 for the week. December’23 lean hogs were down 2.000 on Friday and settled at 66.000, down 3.500 for the week. Even with the sharply lower price in the feeders last week, I feel that they are going to continue to break. In my opinion the feeders could break another 15%-20% from here. If August feeders broke another 15%, they would priced at 223.932. Next year’s prices: June’24 Live Cattle 184.375, August’24 Feeder Cattle 263.450, August’24 Lean Hogs 92.150

LIVE CATTLE CALLS

MONTHSTRIKEPRICECOST
DEC’23 184.625190C1.000$740
195C0.350$270
200C0.125$100
205C0.050$40
210C0.025$10
ATM 184C 3.225ATM STRADDLE 5.825EXPIRES 12/1/23
FEB’24 187.725195C 1.925$1420
 200C0.950$710
 205C0.450$360
210C0.200$180
215C0.025$90
ATM 187C 5.075ATM STRADDLE 9.45EXPIRES 2/2/24
APR’24 190.425200C2.300$1530
206C1.175$840
210C0.725$540
216C0.350$280
220C0.225$180
ATM 190C 6.150ATM STRADDLE 11.900EXPIRES 4/5/24

LIVE CATTLE PUTS

MONTHSTRIKEPRICECOST
DEC’23 184.625180P1.225$410
175P0.450$170
170P0.175$70
165P0.100$40
160P0.050$20
ATM 184P 2.600ATM STRADDLE 5.825EXPIRES 12/1/23
FEB’24 187.725185P3.500$1150
 180P1.925$660
 175P1.025$350
170P0.550$220
165P0.300$130
ATM 187P4.375ATM STRADDLE 9.45EXPIRES 2/2/24
APR’24 190.425186P4.050$1400
180P2.275$820
176P1.175$570
170P0.825$330
166P0.550$230
ATM 190P 5.750ATM STRADDLE 11.900EXPIRES 4/5/24

JUNE’24 LIVE CATTLE

CURRENT PRICE PRICE ACTION PRICE AFTER MOVE STRIKE CURRENT PRICE
184.375 20% BULL MOVE 221.250 220C 0.225
184.375 20% BEAR MOVE 147.500 148P 0.300
184.375 30% BULL MOVE 239.687 238C 0.075
184.375 30% BEAR MOVE 129.062 130P 0.075
184.375 40% BULL MOVE 258.125 258C 0.025
184.375 40% BEAR MOVE 110.625 112P 0.025
CURRENT PRICE REFLECTS TODAYS SETTLEMENT PRICE ONLY AND WILL CHANGE OVER TIME AND WITH VOLATILITY. THERE IS SUBSTANTIAL RISK OF LOSS TRADING FUTURES AND OPTIONS.

FEEDER CATTLE CALLS

MONTHSTRIKEPRICECOST
NOV’23 242.225255C0.300$150
260C0.150$75
265C0.075$37.50
270C0.050$25
275C0.025$12.50
ATM 242C 3.100ATM STRADDLE 6EXPIRES 11/16/23
JAN’24 243.050255C2.300$1,150
 260C1.425$712.50
 265C0.875$437.50
270C0.575$287.50
275C0.375$187.50
ATM 243C 6.375ATM STRADDLE 12.700EXPIRES 1/25/24
MAR’24 245.725266C2.375$1,187.50
270C1.800$900
276C1.175$587.50
280C0.900$450
286C0.625$312.50
ATM 246C 8.600ATM STRADDLE 17.475EXPIRES 3/28/24

FEEDER CATTLE PUTS

MONTHSTRIKEPRICECOST
NOV’23 242.225245P4.600$2,300
240P2.025$1,012.50
235P0.775$387.50
230P0.300$150
225P0.125$62.50
ATM 242P 2.900ATM STRADDLE 6EXPIRES 11/16/23
JAN’24 243.050245P7.375$3,687.50
 240P4.950$2,475
 235P3.175$1,587.50
230P1.975$987.50
225P1.225$612.50
ATM 243P 6.325ATM STRADDLE 12.700EXPIRES 1/25/24
MAR’24 245.725246P8.875$4,437.50
240P6.150$3,075
236P4.700$2,350
230P3.075$1,537.50
226P2.300$1,150
ATM 246P 8.600ATM STRADDLE 17.475EXPIRES 3/28/24

AUGUST’24 FEEDER CATTLE

CURRENT PRICE PRICE ACTION PRICE AFTER MOVE STRIKE CURRENT PRICE
263.450 20% BULL MOVE 316.140 316C 1.600
263.450 20% BEAR MOVE 210.760 212P 1.375
263.450 30% BULL MOVE 342.485 342C 0.725
263.450 30% BEAR MOVE 184.415 186P 0.475
263.450 40% BULL MOVE 368.830 368C 0.425
263.450 40% BEAR MOVE 158.070 160P 0.175
CURRENT PRICE REFLECTS TODAYS SETTLEMENT PRICE ONLY AND WILL CHANGE OVER TIME AND WITH VOLATILITY. THERE IS SUBSTANTIAL RISK OF LOSS TRADING FUTURES AND OPTIONS.

LEAN HOG CALLS

MONTHSTRIKEPRICECOST
DEC’23 66.000 80C0.175$70
85C0.075$30
90C0.050$20
95C0.025$10
100C0.025$10
ATM 66C 2.575ATM STRADDLE 5.150EXPIRES 12/14/23
FEB’24 70.425 80C1.175$470
  85C0.600$240
  90C0.325$130
95C0.175$70
100C0.100$40
ATM 70C 4.300ATM STRADDLE 8.175EXPIRES 2/14/24
APR’24 76.900 90C1.325$530
96C0.675$270
100C0.450$180
106C0.250$100
110C0.175$70
ATM 77C 5.175ATM STRADDLE 10.450EXPIRES 4/12/24

LEAN HOG PUTS

MONTHSTRIKEPRICECOST
DEC’23 66.00070P5.150$2,060
65P2.100$840
60P0.650$260
55P0.200$80
50P0.050$20
ATM 66P 2.575ATM STRADDLE 5.150EXPIRES 12/14/23
FEB’24 70.42570P3.875$1,550
 65P1.925$770
 60P0.850$340
55P0.375$150
50P0.175$70
ATM 70P 3.875ATM STRADDLE 8.175EXPIRES 2/14/24
APR’24 76.90076P4.800$1,920
70P2.475$990
66P1.500$600
60P0.675$270
56P0.400$160
ATM 77P 5.275ATM STRADDLE 10.450EXPIRES 4/12/24

AUGUST’24 LEAN HOGS

CURRENT PRICE PRICE ACTION PRICE AFTER MOVE STRIKE CURRENT PRICE
92.150 20% BULL MOVE 110.580 110C 1.550
92.150 20% BEAR MOVE 73.720 74P 1.425
92.150 30% BULL MOVE 119.795 118C 0.750
92.150 30% BEAR MOVE 64.505 66P 0.625
92.150 40% BULL MOVE 129.010 128C 0.325
92.150 40% BEAR MOVE 55.290 56P 0.175
CURRENT PRICE REFLECTS TODAYS SETTLEMENT PRICE ONLY AND WILL CHANGE OVER TIME AND WITH VOLATILITY. THERE IS SUBSTANTIAL RISK OF LOSS TRADING FUTURES AND OPTIONS.

Bill Allen
Senior Account Executive, Walsh Trading

Phone: 312-957-8079 or 800-556-9411
Email: ballen@walshtrading.com

www.walshtrading.com

Walsh Trading
53 W Jackson Suite 750
Chicago, Il 60604