Comparison of selective hedging and options strategies in cattle feedlot risk management
✍ Scribed by Ted C. Schroeder; Marvin L. Hayenga
- Publisher
- John Wiley and Sons
- Year
- 1988
- Tongue
- English
- Weight
- 776 KB
- Volume
- 8
- Category
- Article
- ISSN
- 0270-7314
No coin nor oath required. For personal study only.
✦ Synopsis
A evaluate the performance of various feedlot marketing strategies. The marketing analysis included corn, feeder cattle, and fed cattle integrated marketing alternatives. A variety of strategies were compared including hedging and put option purchasing as signaled via profit margins or price forecasts. The results indicate that cattle feeders could have historically increased profitability and decreased the variability of profits through selective marketing by using either profit margins or price forecasts to signal market positions as compared to cash marketing strategies. In addition, several strategies were found that stochastically dominated cash marketing.