My Livestock Trade from Last Night's Fast Money

In case you missed my latest appearance on Fast Money‘s Prop Desk last night, below is a clip about the Livestock Trade that appears to be taking off.

Watch the video and then I want to give you a quick idea about how this works…

The vehicle mentioned, COW, is an ETN (exchange traded note) from UBS.  What that means is that it buys the futures contracts for both Lean Hogs (40%) and Live (Beef) Cattle (60%).  It then rolls those contracts to the next month periodically.  There are some risk factors here to be aware of:

1.  An ETN differs from an ETF in that there are no underlying assets here, just the futures contracts themselves.  The intention of the product is to give investors the return of the livestock commodity subindex minus fees (75 basis points annually).  Your credit risk here is that of the issuer, in this case UBS.

2.  Contango is also a prominent risk whenever you’re in a futures-related fund.  COW will be rolling from the February to the April contracts between the 5th and 9th trading day of this month.  So far, contango doesn’t look to be an issue on this roll but investors should be aware of it going forward.

3.  Live Cattle and Lean Hog prices, while promising based on the factors I listed last night, are still commodities and as such they are subject to bouts of extreme volatility.  This is a game for the big boys; I recommend that people determine first whether or not something like this is appropriate for their situation followed by a rational decision about position-sizing within a portfolio.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. fake rolex commented on Sep 18

    … [Trackback]

    […] Find More Info here on that Topic: […]

  2. Blazing Trader Review commented on Sep 22

    … [Trackback]

    […] There you can find 69393 additional Info to that Topic: […]

  3. cuanto vale un bitcoin en dolares commented on Sep 30

    … [Trackback]

    […] Read More on that Topic: […]

  4. How to join Bitcoin Era? commented on Sep 30

    … [Trackback]

    […] Info to that Topic: […]

  5. cheap upart wig commented on Oct 23

    … [Trackback]

    […] Read More here on that Topic: […]

  6. cc dumps commented on Dec 23

    … [Trackback]

    […] Here you will find 82607 additional Information on that Topic: […]

  7. Buy fresh seafood online commented on Dec 30

    … [Trackback]

    […] There you can find 6841 more Info on that Topic: […]

  8. rbc login canada commented on Jan 14

    … [Trackback]

    […] Information to that Topic: […]

  9. sell car australia commented on Jan 15

    … [Trackback]

    […] There you can find 70150 additional Info on that Topic: […]

  10. Chaturbat commented on Jan 26

    … [Trackback]

    […] Find More Info here to that Topic: […]