Live Cattle options let a buyer take a view on price changes while paying a premium for a limited period. A call offers exposure to a rise; a put offers exposure to a fall. The size of the move and the premium determine whether the buyer makes money.
How live cattle options work
The examples use options on live cattle futures. A call gives the right to enter a long futures position at the strike price. A put gives the right to enter a short futures position at that price.
A cattle producer may use live-cattle puts to help protect a selling price. Feeder-cattle options reference younger animals and serve a different exposure.
The cost of one option
One CME contract represents 40,000 pounds. The exchange quotes this product in cents per pound; the examples convert those quotes into dollars. A premium of 8 cents equals $0.08 per pound. At a premium of $0.08 per pound, one option costs $3,200 ($0.08 × 40,000).
Assume the futures price and strike are both $1.8 per pound. The call and put premiums are each $0.08 for comparison, not current quotes. Results below are at expiration, before fees, with any futures position from exercise immediately closed at the stated price.
Buying live cattle calls
Suppose you expect live cattle prices to rise and buy one $1.8 call for $3,200.
If the underlying future reaches $2.04 per pound at expiration, buying at $1.8 gives an advantage of $0.24 per pound. Across 40,000 units, that is $9,600. After the premium, your net profit is $6,400.
At $1.8 or below, the call expires worthless and the loss is $3,200. Breakeven is $1.88 per pound: strike plus premium. At $1.84, the call has value but still loses $1,600 after its cost.
Buying live cattle puts
If you expect prices to fall instead, buying one $1.8 put costs $3,200 in this example.
At a futures price of $1.56 per pound, selling at the strike gives an advantage of $0.24 per pound. The option is worth $9,600 at expiration, leaving a $6,400 net profit after the premium.
At $1.8 or above, the put expires worthless. Breakeven is $1.72 per pound. At $1.76, the price has fallen, but the put still loses $1,600: the move has not covered its premium.
Before expiration
An option can be sold to close before expiration when a market is available. Its price then includes the effect of remaining time and implied volatility, so an earlier trade need not break even at the expiration price calculated above.
The purchased option can lose its whole premium. Exercise can create a futures position requiring margin and exposing you to further gains or losses. An uncovered seller can lose more than the premium received.
Live Cattle price chart
Capital.com Live Cattle CFD reference price. This broker CFD (contract for difference) is a market reference, not a spot price or an exchange futures contract. Prices and quoting units may differ from the contracts described in this guide. Check the widget timestamp and market status; prices may be delayed.
References
Official contract information. Examples are hypothetical and exclude fees. Contract information checked 14 September 2026.