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Analysis Of The Process Of Financialization In The Brazilian Live Cattle Future Market

Author

Listed:
  • Viviane Araujo da Silva

    (Universidade Federal de Viçosa)

  • Marília Fernandes Maciel Gomes

    (Universidade Federal de Viçosa)

  • Leonardo Bornacki de Mattos

    (Universidade Federal de Viçosa)

Abstract

Among the agricultural commodities traded in the futures Market in Brazil, the contract for live cattle is what comes with higher growth in trading volume. In addition, there is a significant increase in the price of the commodity in the spot market. The growing volume of trading is explained by the fact that not only attract hedgers, but also other types of participants, called speculators. In light of the foregoing, this study aimed to evaluate the process of financialization of the Brazilian futures market cattle. To this end, we compared the hedge ratio given in the literature and hedge ratio practiced in the market. The results show that the ratio of hedge practiced in the market has overcome the optimal hedge ratio proposed in the literature from 2006, warning signs of possible existence of a process of financialization.

Suggested Citation

  • Viviane Araujo da Silva & Marília Fernandes Maciel Gomes & Leonardo Bornacki de Mattos, 2013. "Analysis Of The Process Of Financialization In The Brazilian Live Cattle Future Market," Revista de Economia Mackenzie (REM), Mackenzie Presbyterian University, Social and Applied Sciences Center, vol. 11(1), pages 10-27, January-A.
    • Handle: RePEc:aft:journl:v:11:2:may:aug:2013:p:10-27
    DOI: -
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