Journal of Economics and Finance

, 18:357

First online:

A note on odds in the cattle futures market

  • Seth C. AndersonAffiliated withUniversity of North Florida
  • , John D. JacksonAffiliated withAuburn University
  • , Jeffrey W. SteagallAffiliated withUniversity of North Florida

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This paper investigates the odds of generating a 100-fold return in the cattle futures market. We employ cattle futures data for the period October 11, 1978, through July 31, 1979, to compute the probability of obtaining such a return. The tests are constructed to give the investor the benefit of the doubt whenever doubt exists. The most conservative finding is that the probability is one in approximately thirty-one trillion. Assuming that the return is made in the most efficient way possible, this probability falls to approximately 1.5×10−16.