A Study on Hedging of the Calf and Hegde of Live Cattle in the Futures Market at BM&F

Abstract: This study sought to analyze live cattle and calf hedge operations in futures contract operations traded on the BM&F from January 2014 to December 2020. Based on data and values of trades in contracts traded in this period, taken from CEPEA/B3, it became possible to perform some calculations of fundamental variables for the analysis of the risk inherent in carrying out this type of operations and their effectiveness. It is concluded that hedge operations in futures markets are essential for risk management, but these are superior in calf operations compared to similar contracts of the same period for cattle.

Key words: futures market, hedge, cattle, BM&F

JEL codes: Q1