Share an opportunity with an expected return of 10%+

PortfolioAlert · 2026-03-30T03:23:41+00:00

The article discusses investment strategies for live pig options, particularly the volatility and time decay when options approach expiration. It recommends generating profits through a combination strategy of selling put options and buying put options, while emphasizing the advantages of portfolio margin, which can reduce capital risk.

PortfolioAlert

2026-03-30 03:23:41

Abstract generation in progress

The volatility of live hog options is currently elevated, and the 2605 contract still has 19 days until expiration. Everyone knows that the time value of options in the last 14 days decays fastest. Now, selling the 05 contract put option allows you to capture the money from declining volatility and time value.
The chart below shows the volatility of live hogs.

![](https://img-cdn.gateio.im/social/moments-1e2d0f3d6a-3f5b09d3bb-8b7abd-ceda62)

lh2605-p-9600 The current price is 117.5, and the margin per lot is 12363.2. The return rate is approximately 117.5*16/12363.2=15.2%

![](https://img-cdn.gateio.im/social/moments-ded371efbf-8423af766d-8b7abd-ceda62)

lh2605-p-9400 The current price is 77.5, and the margin per lot is 9763.2. The return rate is approximately 77.5*16/9763.2=12.7%

![](https://img-cdn.gateio.im/social/moments-c32ea29b42-5f32808eb2-8b7abd-ceda62)

lh2605-p-9100 The current price is 35, and the margin per lot is 6841.6. The return rate is approximately 35*16/6841.6=8.1%

![](https://img-cdn.gateio.im/social/moments-30a00cdea3-c4378cb438-8b7abd-ceda62)

Personally, I use a bull put spread to go long on live hogs.
Buy lh2605-p-9100 and sell ih2605-p-9600.
Assuming that at contract expiration the lh2605 price is above 9600, both contracts will go to zero. My return rate is approximately 16.5%.
DCE (Dalian Commodity Exchange) has portfolio margin. One pair of margin = (9600-9100)*16=8000.
Return rate = (117.5-35)*16/8000=16.5%.
Compared with futures and naked short put options, the advantage of portfolio margin is that it can lock in margin—meaning that if there’s a big drop, you don’t have to add additional margin.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.