The CME's Live Hog futures contract gives producers and processors a valuable hedging tool. It also gives the trader another profit opportunity. And, since options on live hog futures came on the scene, hedgers and traders have been able to limit risk without sacrificing possible gain.

The Chicago Mercantile Exchange provides a centralized marketplace for trading and risk management. The CME was established in 1919 as the successor to the Butter and Egg Board which had been created in 1898. The Exchange comprises three divisions-the Chicago Mercantile Exchange, on which are traded agricultural futures contracts; the International Monetary Market (IMM) division, established in 1972 for the trading of currency and, subsequently, interest rate futures; and the Index and Option Market (IOM) division, activated in 1982 for the trading of equity-related futures, in addition to options on futures.