Cattle Futures -- Locked LimitDown

Can you guys educate this equity only trader? When a limit move occurs how does the issue trade? At that opening price? Or does it just open at that level and cease trading until the next session?
 
Funny how they weren't playing up that angle when the US disallowed imports of Canadian beef after one cow was found here with bse. They were more smug and gleeful about the situation as I recall.

What goes around, comes around.

Quote from riskarb:

Gotta love it -- rep. of the Cattleman's Assoc. attempting damage control in stating that Mad Cow isn't in muscle, only brain and CNS -- how comforting!

arb.
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Quote from limitdown:

wow,

is this a curtain call?
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Where do you guys get this info from ? I searched the CME site , I couldn't find any info.

Thanks,

Chinook

Edit. OK I found the price limits in CME site. I was wondering why cattle futures didn't react too much! Limitdown is $600/contract. 600/1620= 37% loss per contract assuming maximum margin. Ouch! And more coming possibly!

I wonder how much change we'll see in the supermarket beef prices. The prices have been going up steadily! My favorite "average"-grade ribeye has climbed from $7.99 to $11.99 / lb this year!

 
Quote from lescor:

Funny how they weren't playing up that angle when the US disallowed imports of Canadian beef after one cow was found here with bse. They were more smug and gleeful about the situation as I recall.

What goes around, comes around.
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Yeah, irony is a bitch! :D

The guy did seem to be pretty wired -- imagine owning all those head of cattle and selling your production in the futures, only to find that you can't sell the cattle(you've sold forward)!!

Not a likely scenario, admittedly.

arb.
 
Quote from riskarb:

Yeah, irony is a bitch! :D

The guy did seem to be pretty wired -- imagine owning all those head of cattle and selling your production in the futures, only to find that you can't sell the cattle(you've sold forward)!!

Not a likely scenario, admittedly.

arb.
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And a major brain-fart on my part, duh, he'd simply buy back his futs at a massive gain.

I better get checked for CJD!

:eek:

arb.
 
Quote from indahook:

Can you guys educate this equity only trader? When a limit move occurs how does the issue trade? At that opening price? Or does it just open at that level and cease trading until the next session?
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it doesnt trade.it opens limit down every day until they find buyers.it is not a good position to be on the wrong side of.
 
Quote from vhehn:

it doesnt trade.it opens limit down every day until they find buyers.it is not a good position to be on the wrong side of.
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Vhen,

Do you mean in this case, it opens -150 points from the previous day's close until the buyers step in? So today, it closed limitdown at 89.175 and Friday it'll open at 87.675 if there are no higher bids?



Chinook
 
Quote from chinook:

Vhen,

Do you mean in this case, it opens -150 points from the previous day's close until the buyers step in? So today, it closed limitdown at 89.175 and Friday it'll open at 87.675 if there are no higher bids?

Chinook
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yes.
 
Let's say cattle traders/firms/hedgers project that this'll drive the beef prices 30% down in US and push the cattle futures down to 60 from 90s-- $0.30 loss/pound. This means about $12,000 loss per contract !!!! Somebody long 20 contracts with total initial margin about ($1620 old margin) $32400 would end up owing more than $200,000!!! Ouch !!!

Chinook
 
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