Pork Bellies Options Explained

Pork Bellies options are option contracts in which the underlying asset is a pork bellies futures contract.

The holder of a pork bellies option possesses the right (but not the obligation) to assume a long position (in the case of a call option) or a short position (in the case of a put option) in the underlying pork bellies futures at the strike price.

This right will cease to exist when the option expire after market close on expiration date.

Pork Bellies Option Exchanges

Pork Bellies option contracts are available for trading at Chicago Mercantile Exchange (CME).

CME Pork Bellies option prices are quoted in dollars and cents per pound and their underlying futures are traded in lots of 40000 pounds (18 metric tons) of pork bellies.

Exchange & Product NameUnderlying Contract SizeExercise StyleOption Price Quotes
CME Pork Bellies Options40000 lb
(Full Contract Specs)

Call and Put Options

Options are divided into two classes - calls and puts. Pork Bellies call options are purchased by traders who are bullish about pork bellies prices. Traders who believe that pork bellies prices will fall can buy pork bellies put options instead.

Buying calls or puts is not the only way to trade options. Option selling is a popular strategy used by many professional option traders. More complex option trading strategies, also known as spreads, can also be constructed by simultaneously buying and selling options.

Pork Bellies Options vs. Pork Bellies Futures

Compared to the outright purchase of the underlying pork bellies futures, pork bellies options offer advantages such as additional leverage as well as the ability to limit potential losses. However, they are also wasting assets that has the potential to expire worthless.

Additional Leverage

Compared to taking a position on the underlying pork bellies futures outright, the buyer of a pork bellies option gains additional leverage since the premium payable is typically lower than the margin requirement needed to open a position in the underlying pork bellies futures.

Limit Potential Losses

As pork bellies options only grant the right but not the obligation to assume the underlying pork bellies futures position, potential losses are limited to only the premium paid to purchase the option.


Using options alone, or in combination with futures, a wide range of strategies can be implemented to cater to specific risk profile, investment time horizon, cost consideration and outlook on underlying volatility.

Time Decay

Options have a limited lifespan and are subjected to the effects of time decay. The value of a pork bellies option, specifically the time value, gets eroded away as time passes. However, since trading is a zero sum game, time decay can be turned into an ally if one choose to be a seller of options instead of buying them.

Learn More About Pork Bellies Futures & Options Trading

Ready to Start Trading Futures?

Trade futures now at OptionsHouse.com with special low introductory contract rates!

To buy or sell futures, you need a broker that can handle futures trades.

OptionsHouse is a full fledged Futures Commission Merchant that provides a streamlined access to the futures markets at extremely reasonable contract rates.

Click here to open a futures trading account at OptionsHouse.com now!

Follow Us on Facebook to Get Daily Strategies & Tips!

Pork Bellies Options & Futures

Futures Basics

Livestock Futures

Options Strategy Finder

Outlook on Underlying:

Profit Potential:

Loss Potential:


No. Legs:

Join the Discussions @ The Options Forum

Beginners Questions

Advanced Strategy Talks

RSS Feed Widget

Trading Ideas & Opportunities

Home | About Us | Terms of Use | Disclaimer | Privacy Policy | Sitemap

Copyright 2016. TheOptionsGuide.com - All Rights Reserved.