Arrangements between hog producers and packers or processors today are diverse and ever-evolving. Once based almost exclusively on the value of live hogs, many agreements now pay greater attention on prices further down the value chain, particularly the pork cutout.
New CME Pork Cutout futures and options are designed to give the US pork industry and export markets tailored risk-management tools on the cutout. These contracts are cash-settled to the CME Pork Cutout Index and complement CME Lean Hog futures and options, expanding our lineup of leading Agricultural benchmarks.
|Contract Title||Pork Cutout Futures||Options on Pork Cutout Futures|
|Contract Unit||40,000 pounds|
|Price Quotation||U.S. Cents per pound|
|Trading Hours||CME Globex: Monday - Friday: 8:30 a.m. - 1:05 p.m. CT
Pre-Open: 8:00 am – 8:29.59 am & 2:30 pm – 4:00 pm
|CME ClearPort: 5:00 p.m. Sunday to 5:45 p.m. Friday; with a 15-minute break Monday – Thursday each day beginning at 5:45 p.m.|
|CME Rulebook Chapter||156||156A|
|Initial Listing months||DEC20, FEB21, APR21, MAY21, JUN21, JUL21, AUG21, OCT21, DEC21, FEB22, APR22, & MAY22|
|Minimum price increments||$0.00025 per pound ($10 per tick)||
Full Tick: $0.00025 per pound ($10)
|Strike Price listing procedures||-||Strikes listed for 50% of the underlying settlement price above and below the at-the-money strike at $0.02 per pound increments in all months and additional strikes listed for 25% of the underlying settlement price above and below the at-the-money strike at $0.01 per pound increments in the nearest 3 months.|
|Exercise procedure||-||Any business day that the option is traded until 5:30 p.m. CT|
|Termination of Trading||Trading terminates on the 10th business day of the contract month.|
|Settlement Method||Financially settled to the CME Pork Cutout Index.|
|Position Limits||1,000 contracts net long or short in any single month.|
|350 contracts net long or short as of the close of trading on the fifth business day of the contract month.|
|Reportable Level||25 contracts|
|Block Trade Minimum||5 contracts|
|Block Trade Reporting Window||5 minutes||15 minutes|
|CME Globex matching algorithm||F: First In, First Out (FIFO)|
|Pork Cutout futures and options 11/8/2020|
|Product Name||CME Globex||Bloomberg||Refinitiv Globex RIC Root||Refinitiv Composite RIC Root||TT||CQG||DTN||Fidessa||FIS Global||ION (Pats & FFastFill)||Itiviti (Orc & Tbricks)||Vela|
|Pork Cutout Futures||PRK||PRCA <Comdty>||1RPK||RPK||PRK||PRK||@PRK||PRK||PRK||PRK||PRK||PRK|
|Options on Pork Cutout Futures||PRK||PRCA <Comdty> OMON||1RPK||RPK||PRK||PRK||@PRK||PRK||PRK||PRK||PRK||PRK|
Featured OpenMarkets white paper discussing the evolution of Pork markets.
This white paper provides an overview of the Pork Cutout contracts and illustrates how they may be used to manage wholesale pork product price risk.
An introduction to the mechanics of using futures and options to help livestock producers and processors become comfortable with the futures markets and how to use them.