1. spread arbitrage: Intertemporal live pig contracts allow traders to arbitrage by using the spread between live pig futures contracts in different delivery months. By buying low-priced contracts and selling high-priced contracts, traders can profit from price fluctuations. This arbitrage strategy can effectively take advantage of market price fluctuations and improve the return on investment.
2. Risk management: The pig intertemporal contract can also be used for risk management. The price of live pigs is influenced by many factors, such as supply and demand, seasonal changes, and policy regulation. By establishing contract positions in different delivery months, traders can spread risks and reduce their sensitivity to price fluctuations in a single delivery month. This helps to protect investors from market fluctuations and improve the stability of the portfolio.