A note on odds in the cattle futures market

Abstract

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.

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Correspondence to Seth C. Anderson.

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Anderson, S.C., Jackson, J.D. & Steagall, J.W. A note on odds in the cattle futures market. J Econ Finan 18, 357 (1994). https://doi.org/10.1007/BF02920493

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Keywords

  • Price Change
  • Future Market
  • Wall Street Journal
  • Limit Move
  • Future Contract