Beef Margin Simulation

Welcome to the CIH Beef Margin Simulation

Please take a moment to review the objective of this simulation, consult the instructions, and note the simulation rules. During the simulation, you’ll be able to access this information again.

Your Objective

In this simulation you are a beef producer that needs to manage feeder cattle purchases, feed prices and live cattle sales for 1,000 head. Your first trading decision starts in June and finishes by February of the following year.

Feeder Cattle Volume Requirement:

Buying 800,000 Pounds (16 contracts)

Contract Coverage Rules
Each of the following strategies equals
50000 Pounds (1 contract) of coverage:

  • 1 Long Futures
  • 1 Long Call Option
  • 1 Long Call Option Spread
  • 1 Short Put Option
  • 1 Long Call Option + 1 Short Put Option
  • 1 Long Call Option Spread + 1 Short Put Option

Corn Volume Requirement:

Buying 80,000 Bushels (16 contracts)

Contract Coverage Rules
Each of the following strategies equals
5000 Bushels (1 contract) of coverage:

  • 1 Long Futures
  • 1 Long Call Option
  • 1 Long Call Option Spread
  • 1 Short Put Option
  • 1 Long Call Option + 1 Short Put Option
  • 1 Long Call Option Spread + 1 Short Put Option

Live Cattle Volume Requirement:

Selling 1,280,000 Pounds (32 contracts)

Contract Coverage Rules
Each of the following strategies equals
40000 Pounds (1 contract) of coverage:

  • 1 Short Futures
  • 1 Long Put Option
  • 1 Long Put Option Spread
  • 1 Short Call Option
  • 1 Long Put Option + 1 Short Call Option
  • 1 Long Put Option Spread + 1 Short Call Option

Get Started

Press “Go” to start the simulation.