Livestock
Cash cattle absolutely screamed higher yesterday and took the futures board along with it. This is the problem I mentioned yesterday…you have a cash market that just doesn’t want to break 130 to the downside and a deliverable futures contract trading well under that heading into first notice. Now that the cash cattle market has exploded again, the futures board is playing catch-up. Limits are expanded today, and based on the strength in cash I wouldn’t be totally surprised if those expanded limits were tested today.
Today is also option expiration in June cattle. As you can see below, there is above-normal resting open interest at the June 130 strike level. That’s a lot of short calls sitting there that probably didn’t expect to be sitting ATM on expiration just 24 hours ago. With cash trading 137, I’m not sure these guys will want to go home today short futures if the board does indeed continue higher today.
Please note this is just a small sampling of commentary available to clients. Please visit www.nesvick.com for more information.
DISCLAIMER:
The information contained herein has been taken from trade and statistical services and other sources we believe are reliable. Opinions expressed reflect judgments at this date and are subject to change without notice. These materials represent the opinions and viewpoints of the author and do not necessarily reflect the opinions or trading strategies of Nesvick Trading Group LLC and its subsidiaries. Nesvick Trading Group, LLC does not guarantee that such information is accurate or complete and it should not be relied upon as such. Officers, employees, and affiliates of Nesvick Trading Group, LLC may or may not, from time to time, have long or short positions in, and buy or sell, the securities and derivatives (for their own account or others), if any, referred to in this commentary. There is risk of loss in trading futures and options and it is not suitable for all investors. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RETURNS. Nesvick Trading Group LLC is not responsible for any redistribution of this material by third parties or any trading decision taken by persons not intended to view this material.
