The cattle markets have been under heavy pressure since mid-June, and price action has yet to confirm a bottom in either the fats or the feeders. However, the underlying fundamentals are becoming hard to ignore. Placements on last Friday’s Cattle on Feed report were 11% behind last year and below the average pre-report trade estimate. September feeder cattle are trading at a steep discount to the index, and technicals are pointing toward a heavily oversold market. There was a lot of bad news hitting all at once. The downtrend in the cattle markets could continue but I feel that the risk/reward is starting to favor the upside. The trades below have a lot of time allowing you to leg into a position at lower prices, even if it’s still too early for a reversal.
Consider the following opportunities:
NOVEMBER’26 FEEDER CATTLE 304.50
BUY 1 NOVEMBER’26 330 CALL 2.82 ½
SELL 1 NOVEMBER’26 340 CALL 1.45
SELL 1 NOVEMBER’26 280 PUT 2.97 ½
BUY 1 NOVEMBER’26 270 PUT 1.72 ½
PRICE: 0.12 ½
COST: $62.50/TRADE PACKAGE, PLUS FEES AND COMMISSIONS
NOVEMBER’26 FEEDER CATTLE OPTIONS EXPIRE 11/19/26 (85 DAYS)
MAXIMUM LOSS: LIMITED
BUY 1 NOVEMBER’26 334 CALL 2.25
SELL 1 NOVEMBER’26 286 PUT 4.25
BUY 1 NOVEMBER’26 276 PUT 2.47 ½
PRICE: 0.47 ½
COST: $237.50/TRADE PACKAGE, PLUS FEES AND COMMISSIONS
NOVEMBER’26 FEEDER CATTLE OPTIONS EXPIRE 11/19/26 (85 DAYS)
MAXIMUM LOSS: LIMITED
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