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Tools available to help navigate market volatility

Understanding how to utilize the futures market can be a lot for producers to wrap their heads around.

Makenzie Billings, manager, agricultural and alternative investment products, says the CME Group has developed tools to participants better navigate the volatility in the markets. “And give them a little more comfort level when making decisions on when to place hedges, how to place hedges, and things of that nature,” she says. 

She tells Brownfield the CME Group Volatility Index (CVOL) measures the expected risk of a futures contract, like live cattle.  “You will be provided with a chart where you can see volatility along with the underlying price,” she says. “You can compare the two. We also provide a little bit of a historical look back so you can go back and look and see what volatility did during a particular event.”

Billings says the move to electronic trading shows more of the market movement throughout the day.  “Ultimately, we’re ending up in the same place, we normally would have, you’re just seeing the activity going on in between,” she says. 

She says CVOL is free of charge to use and can be found at www.cvol.com

AUDIO: Makenzie Billings, CME Group