Contract Specs That Matter in Lean Hog Trading

Lean hog traders obsess over charts and reports, but the contract itself quietly defines how much damage a move can do.

If you don’t understand the mechanics, hog volatility feels unfair. If you do, it looks mechanical.

The handful of specs that actually change your risk

Most spec sheets are ignored because traders don’t think the details matter. In lean hogs, they matter because they directly affect dollar exposure, fill quality, and “can I even get out” behavior.

Contract size magnifies small moves

Lean hogs are quoted in cents per pound, but the contract represents a large quantity of pork.

That means routine price movement translates into meaningful dollar swings quickly. What looks like a modest chart move can carry real risk if size isn’t adjusted.

Tick value shapes execution pain

Hog ticks are small, but slippage isn’t.

During fast markets, price often skips ticks instead of trading through them. The spec doesn’t change, but realized risk does when liquidity thins.

Daily limits matter more than traders expect

Lean hogs have daily price limits.

When those limits are approached or hit, normal trade management breaks. Stops don’t behave normally, exits get delayed, and risk becomes time-based instead of price-based.

Delivery months aren’t interchangeable

Each contract month reflects different seasonal and supply conditions.

Liquidity, volatility, and sensitivity to data vary by month. Traders who treat all hog contracts the same learn this the expensive way.

Settlement mechanics change incentives

Lean hogs are cash-settled against an index.

That means pricing behavior near expiration reflects index expectations, not physical delivery pressure. Futures can move sharply without any last-minute scramble for hogs.

Lean hog contracts don’t hide risk. They define it in advance.