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In an effort to be brief, perhaps I wasn't clear.
When commercial producers sell hog futures (or whatever)
it's very different from insiders selling stock.
They can fade a trend in the futures for years while
their "cash" position gains with the trend. It's not
to say there is no value in studying the commercials,
just that it may not be obvious why they do what they do.
I was going to say check out CTS' long term charts, but:
http://www.cftc.gov/enf/00orders/enfcts.htm
Try:
http://www.cftc.gov/cftc/cftccotreports.htm
BW
>From: cwest@xxxxxxxxxxxx
>To: <omega-list@xxxxxxxxxx>
>Subject: RE: which pork prices to use
>Date: Tue, 27 Nov 2001 10:12:52 -0700
>
>One never knows, or at least shouldn't if you're intending to take
>advantage
>of privileged information, why insiders in concert are selling into their
>stock's strength. But looking at insider and analyst history which I have
>online, there is a pattern of insiders leading the way.
>
>Generally, insiders buy in concert before analyst' ratings firm, and
>insiders sell in concert when they are of an opinion that their stock's
>momentum is out of wind. The usual hedge play is to use options of the
>stock
>or a stock index option. (A whole position can be structured only with
>options, too). But I'm curious to discern the value of any tracking error
>between a company in "pork" and "pork futures."
>
>Colin
>
> -----Original Message-----
>From: Bill Wynne [mailto:tradewynne@xxxxxxxxxxx]
>Sent: Tuesday, November 27, 2001 9:57 AM
>To: cwest@xxxxxxxxxxxx; omega-list@xxxxxxxxxx
>Subject: Re: which pork prices to use
>
> >Given one is of the opinion that the insiders know something the
>Analysts'
> >don't, which is often the case :-)
>
>Often true, but sometimes they are just getting closer to flat rather than
>getting short. By definition and necessity they may be "long" the
>underlying
>cash product which they can't sell as easily as the futures.
>Maybe your hog hedge is based on hedge(d) hogs.
>
>:-)
>
>BW
>
>
> >From: cwest@xxxxxxxxxxxx
> >To: "Omegalist" <omega-list@xxxxxxxxxx>
> >Subject: which pork prices to use
> >Date: Tue, 27 Nov 2001 09:18:39 -0700
> >
> >I'd like to see how useful a hedge using "pork" futures might be, and I'd
> >appreciate suggestions as to which is the most indicative contract of
>pork
> >prices. For example Smithfield Foods (SFD) is one of the world's largest
> >pork processors and hog producer. Recently the price moved to news highs,
> >however, the insiders at the company have been selling into the momentum.
> >Going against the trend if you will.
> >
> >Given one is of the opinion that the insiders know something the
>Analysts'
> >don't, which is often the case :-), which pork futures contract could be
> >most useful to buy to cover a short sale of SFD? (I'd also expect to
>factor
> >in the value of a futures contract and ratio its volatility in relation
>to
> >SFD's volatility).
> >
> >Thanks in Advance
> >Colin West
> >
>
>
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