Hog Margin Simulation

Welcome to the CIH Hog 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 hog producer that needs to protect your fourth quarter margin on 6 million pounds of pork. Your first trading decision starts in April and finishes by the middle of August.

Corn Volume Requirement:

Buying 250,000 Bushels (50 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

Soybean Meal Volume Requirement:

Buying 1,500 Tons (15 contracts)

Contract Coverage Rules
Each of the following strategies equals
100 Tons (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

Lean Hogs Volume Requirement:

Selling 6,000,000 Pounds (150 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.