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The Feeder Cattle Index is currently at 351.93. The August futures contract expires at the end of August on the 27th. I am looking for the index to trade between 345.00 – 355.00 through the end of the month with the index expected to settle around 350.00 – 352.00.
Conservative trade idea:
Buy the GFQ26 345.00 – 350.00 call spread for $650 plus commissions and fees. Max risk is price paid for spread plus commissions and fees. Max profit is $2500.00 less price paid plus commission and fees. Expiration is August 27th.
Aggressive trade idea:
Buy the GFQ26 345.00 call and sell the GFQ26 350.00 – 345.00 Put spread. You can receive a credit of $700.00 less commissions and fees. Maximum risk is $1,800.00 plus commissions and fees. Profit potential is if index settles above 350.00 you keep the put spread differential plus the differential between the 345.00 call and the index price less commissions and fees.
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Livestock Analyst
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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