The CME Group is proposing changes to the daily price limits for live and feeder cattle futures.
First, the group is requesting approval to implement a bi-annual reset of daily price limits for both live and feeder cattle contracts rather than an annual reset. Price limits are currently updated on the first trading day in June each year. The CME Group proposes adding a second price limit update on the first trading day in December each year.
“This mechanism will provide additional relevance and accuracy to the price limits of the Contracts,” the group said.
In addition, the CME Group is requesting to decrease the percentage utilized to establish initial price limits for the live cattle futures contract bi-annually from 3.5% to 3%. The CME Group said that a price limit set at 3% for live cattle futures will “likely capture daily price moves with approximately 99 percent confidence on average.”
The changes are pending approval by the Commodity Futures Trading Commission.
