Synthetic cows: How not to cover your trading losses

Here’s one way to do the cattle business. You buy some small cows, feed them until they are big cows, then kill them and sell the meat.

Here’s another way. You get paid by someone else who wants to kill the cows and sell the meat but doesn’t want the hassle of buying and feeding them. You do that bit for them, billing them along the way for the cows and the food, and then there is a mechanism for you either getting a profit or taking a loss when the meat is finally sold.