Transcription of THE CATTLE CRUSH AND REVERSE CRUSH - …
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1 | THE CATTLE CRUSH AND REVERSE CRUSHWHAT IS THE CATTLE CRUSH ?The CATTLE CRUSH trade seeks to replicate the gross margin of a typical feedlot operation by calculating the spread between input costs and the output sale price. For a typical feedlot, the two primary inputs are feeder CATTLE and corn while the output is live CATTLE , which are sent to market once the feeding process ends. The long CRUSH trade combines taking a long position in feeder CATTLE and corn with corresponding short positions in live CATTLE . The approximate ratio of corn, feeder CATTLE and live CATTLE therefore is as follows: 2 corn and 3 feeder CATTLE to 6 live CATTLE .
4 | THE CATTLE CRUSH AND REVERSE CRUSH CATTLE CRUSH(2,3,6) DAILY VALUES AND POTENTIAL PROFITS. Cattle Crush: Feb 2012 Live Cattle . 6 Feb ‘12 Live Cattle - 3 Sep ‘11 Feeder Cattle - 2 Dec ‘11 Corn
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