Flood Warning

Moves To Stop Volatile Cattle Market

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Cattle futures were added to a system that caps how many orders traders can send in relation to the number of trades executed to curb volatility.
The CME Groups made these changes in time for futures trading yesterday.
The move was a response to a National Cattlemen's Beef Association meeting last week, where CME Chairman Terry Duffy heard complaints.
Market analyst Jamey Kohake with Paragon Investments says it started a little over a year ago where limit moves started up a volatile cattle market. That wrecked balance sheets because of robot trading.
Kohake says, "And that's what everyone's so disgusted over--Was people losing the generation of wealth over robots in New York and/or Chicago. Push these markets over based on no fundamentals at all. So they're talking about putting circuit breakers in to limit that. So we don't have these big extreme moves. There was also talk over how do we link these future products to fundamentals."

 

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