Timeline for How do speculators make profit?
Current License: CC BY-SA 4.0
9 events
| when toggle format | what | by | license | comment | |
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| Nov 25, 2019 at 17:58 | comment | added | Criticizing Israel not allowed | @BobBaerker The contract is worth $95k, or the lumber is worth $95k? | |
| Nov 15, 2019 at 19:33 | history | edited | Bob Baerker | CC BY-SA 4.0 |
Fixed my poor grammar
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| Nov 15, 2019 at 19:29 | vote | accept | GGGG | ||
| Nov 15, 2019 at 15:57 | comment | added | Bob Baerker | Simplified example: You are speculator and I am the hedger. You sell a 3 month lumber contract for $100k. I own trees which I'll harvest in 3 months, convert to lumber and sell. What will be the price in 3 months? Don't know but I can sell them today for $100k by selling the contract so I do so. 3 months from now, the contract is worth $95k. Both of us made $5k on the contract but my lumber is worth $5 less then than it was 3 months ago (now). I locked in my sale price and my two assets offset each other (futures and raw lumber). | |
| Nov 15, 2019 at 15:34 | comment | added | GGGG | i added a link on the question to show you what the slides are like. | |
| Nov 15, 2019 at 15:32 | comment | added | GGGG | The explanation that i gave under my question are the professors's slides. So pratically my confusion begins where it states that in a long position , the hedger gains profit if the price decreases. But if the speculator is in the long position , then he gains when prices increase. So pratically what the slides says is that they are the opposite . is this correct? | |
| Nov 15, 2019 at 15:12 | comment | added | Bob Baerker | Your question (or is that a homework answer?) isn't written concisely with clarity. I had to read it 3 times to figure out who you were referring to and their P&L in each circumstance. | |
| Nov 15, 2019 at 13:55 | comment | added | GGGG | Thanks for the output! last question: is what i wrote on my question correct anyhow? i mean the things i wrote on the long position and short position for hedgers and speculators. | |
| Nov 15, 2019 at 13:15 | history | answered | Bob Baerker | CC BY-SA 4.0 |