Live Cattle Spread Points to Lower Prices

We are short April Live Cattle with a 138.0 April Put option we purchased back on 2/5/14 for $600 which expires on 4/4/14.  That doesn’t give us much time left to be ‘in the money’ with this option (or to execute the option and be short April Live Cattle from 138.0).  See our previous post:  Shorting Live Cattle Futures for details.

Looking at the Daily April and June Live Cattle Futures charts below, you can see that yesterday’s prices closed at 144.425 for the April contract, but closed at 136.20 for the June contract.  This indicates  that prices will be lower in the near future.  If the April Futures contract prices catch up (or down, as the case may be) to the June Futures prices our 138.0 Put option will be in the money and we may yet make some money on this trade.  Only time will tell.  Stay tuned.

April Live CattleJune Live Cattle

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