baby gurl xo


Implementation: Students will work in groups of 2 or 3 and research a commodity that is traded in the futures market. Each group will be given $100,000 per week to invest. The group must track the price of the futures contract(s) on a daily basis. The group will be responsible to research the suppoly and demand forces that are driving the price of the futures contract. A summary report will explain what you learned during this project.

Summar:
-Take an opening position (i decided to go short–which means sell– and my commodity is sugar)
-close your position (whatttt?! idk how…)

Summary explainning:
Why you opened your position? (idk…..)

What actually happened to your futures contract?
[discuss the supply and demand forces] (again… what?)

How right or wrong you were?
[figure and discuss your profit or loss here]

What you would do different the next time?
[reflect and discuss what you would do if you could start again.

Complete an article review on your futures contract. (huh?)

HELP SOMEONE PLEASE!!! I CAN’T FAIL THISS!!!!

One Response to “Futures Market Project (my teacher hasnt explained ANYTHING about it) help? i dont get economics.”

1. Poor Horatio on May 17th, 2009 8:34 am

   I’m assuming that you are trading Sugar 11 and not Sugar 14 contracts.

   CLOSE YOUR POSITION
   To close your position, you must do the opposite of what you did to open your position.
   Since you opened by selling 1 contract of sugar, to close, you must buy 1 contract of sugar. The closing long position cancels the opening short position.

   SUMMARY EXPLAINING
   You opened with a short position because you believed that the price of sugar would decrease. Had you believed that the price would increase, you would have opened with a long position. For every 1 cent change in the trading price of sugar, that is equal to $1,120 of profit or loss to your account. Each sugar contract controls 112,000 pounds of sugar. Although the margins vary over time, purchasing or selling the minimum 1 contract of sugar today requires $1,120.

   WHAT ACTUALLY HAPPENED TO YOUR FUTURES CONTRACT
   Prices generally increase when there is not enough supply for the amount of buyers. Prices generally decrease when the supply exceeds the amount of buyers. That is the basic economic law of supply and demand.
   You will have to choose a time frame, then look up the price of sugar for the beginning and ending of that time frame, then determine your profit or loss.

   HOW RIGHT OR WRONG YOU WERE
   If the trading price increased by 5 cents during the time your position was active, you lost 5*1120 = $5600 for each contract you controlled.
   If the trading price decreased by 5 cents during the time your position was active, you made $5600 for each contract you controlled.

   WHAT YOU WOULD DO DIFFERENT
   Minimize your losses with a stop loss order.
   Also, monitor fundamental and technical data.
   Fundamental data is news about factors that could affect the supply of sugar. Example – violent weather in a sugar growing area could decrease the supply, thereby driving prices up. Or bad health news about sugar could reduce the demand and therefore cause prices to decrease.
   Techincal data is analyzing past sugar prices charted on a graph. Then using certain formulas and theories, you look for patterns. This might help you predict prices in the future.

   I am a former futures investor. If you want to learn more from a former sugar futures trader, click on the source link I posted below.

Leave a Reply

You must be logged in to post a comment.