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88 votes

Could I make money off of the negative oil price?

Sure you can make money from this. Just get paid to take barrels of crude oil from a producer, take them home, and sell them to someone once the price increases. Problem is: Do you know the laws and ...
Nosjack's user avatar
  • 8,827
60 votes
Accepted

What's funny about "He leveraged his @#% deep into soy beans and cocoa futures" in The Jerk (1979)?

The joke contrasts a low risk investment strategy with an extremely high risk strategy. The modern equivalent would be "He leveraged his ass deep into Bitcoin and GameStop futures." The low ...
Atomic Tripod's user avatar
41 votes

What happens if I do not honor a futures contract?

A futures contract is legally enforceable just like any other contract so the entity at the other end of the contract will have every right to sue you, extract fair recourse per the contract, and ...
WittyID's user avatar
  • 2,023
39 votes

Can I hedge my household expenses using the financial markets?

You don't consume enough of any one good to make hedging with futures economical. I'll present an alternate method - you hedge against risk in household expenses by setting a budget and sticking to it....
D Stanley's user avatar
  • 138k
37 votes

How are they earning money in the movie "Trading Places"?

They are not selling stocks. They are selling OJ futures contracts. Selling a futures contract at 142 gives the buyer the right to buy a fixed number of pounds of orange juice concentrate ("OJ") on a ...
unutbu's user avatar
  • 805
32 votes

Could I make money off of the negative oil price?

The way to make money off of this would be to buy the futures contracts that are negative then hope that it goes back positive (or at least less negative) before they expire tomorrow. There's no ...
D Stanley's user avatar
  • 138k
30 votes

Could I make money off of the negative oil price?

There is nothing really unique to oil here. There are many other things which have a "negative price", and they have it always, not just temporarily like in the case of oil. Waste (especially ...
vsz's user avatar
  • 1,919
18 votes

What happens if I do not honor a futures contract?

The contract specifies the delivery, generally it is for the buyer to arrange for transport to his location. If the buyer doesn't pick up from the location, he is hit with warehouse charges and the ...
Dheer's user avatar
  • 57.1k
15 votes

Could I make money off of the negative oil price?

The price for physical barrels filled with crude oil isn't actually negative right now in most regions of the world. If you need a barrel of oil for your petroleum refinery, then you will at least ...
Philipp's user avatar
  • 24k
15 votes

Why are options more popular than futures among retail investors?

In the US, options (other than options on futures) are securities (like stocks), are regulated by the Securities and Exchange Commission (SEC), and can be traded in a normal brokerage account. Futures ...
nanoman's user avatar
  • 30.2k
13 votes

Why do futures traders write months in a strange way?

One explanation from https://www.quora.com/In-futures-contracts-each-month-is-represented-by-a-letter-code-This-is-done-alphabetically-but-why-does-it-start-in-F-for-January-and-why-are-some-letters-...
Franck Dernoncourt's user avatar
12 votes

Could an individual make money off of oil futures?

A million barrels of oil would be a high end tanker, and second hand prices seem to be about $60 to $100 million dollars, so there is a bit of a hole in the budget before you start thinking about ...
richardb's user avatar
  • 1,940
12 votes
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Why are options more popular than futures among retail investors?

These are just two products and not really an 'either-or' comparison; a little bit of apples and oranges. Still, there is some merit in looking at each product in the terms you've raised. Options [...
Grade 'Eh' Bacon's user avatar
11 votes

Is it practical to take actual delivery on a futures contract, and what is the process?

Here's a good link that can answer your question: How to take delivery of a futures contract The relevant part states: Prior to delivery day, they inform customers who have open long positions ...
Daniel Anderson's user avatar
11 votes
Accepted

Why do commodities futures prices have "-" in them

Some futures markets are priced using a fractional pricing rather than decimal pricing. The example you've mentioned, Soybeans, is priced in cents per bushel, and the "tick size" (the minimum ...
Richard at NorgateData's user avatar
11 votes

Can I hedge my household expenses using the financial markets?

The largest personal cost you have is probably housing - and you can hedge the risk of real estate fluctuations without use of financial instruments. ie: you can buy your home. You might not consider ...
Grade 'Eh' Bacon's user avatar
11 votes
Accepted

What do single quotation marks in the price of futures mean?

Cash bonds and futures based on U.S. Treasury securities do not trade in decimal format but in full percentage points, plus fractions of a 1/32 of par value. (Source: Calculating U.S. Treasury ...
Flux's user avatar
  • 17.1k
10 votes

Can I hedge my household expenses using the financial markets?

In theory (but not practical in reality), you could hedge each of those expenses with various inflation swaps, futures, and other OTC products. Housing costs can be hedged by exposing to REITs ...
Jake Freeman's user avatar
9 votes

Is it practical to take actual delivery on a futures contract, and what is the process?

Not all futures contracts are deliverable. Some futures are specified as cash settlement only. In the case of deliverable contracts, part of the specification of a futures contract will be the ...
not-nick's user avatar
  • 6,420
9 votes
Accepted

Buy or sell futures contracts

Buying (or selling) a futures contract means that you are entering into a contractual agreement to buy (or sell) the contracted commodity or financial instrument in the contracted amount (the contract ...
not-nick's user avatar
  • 6,420
8 votes

Executing an options on futures before delivery date

The answer to the question, can I exercise the option right away? depends on the exercise style of the particular option contract you are talking about. If it's an American-style exercise, you can ...
Bruno Reis's user avatar
8 votes

Could I make money off of the negative oil price?

Free WTI oil is available if the buyer has oil storage. Quantities available are in increments of 500 barrels. But the sale ends tomorrow. Now stored oil has significant value.
S Spring's user avatar
  • 3,592
7 votes

Is there any flaw in this investment scheme?

You didn't win in case B. Borrowing shares and then selling them is known as "selling short". You received $2000 when you sold short 100 shares at $20. You spent $1000 to buy them back at $10, so ...
Nate Eldredge's user avatar
7 votes

Is investing in index futures better than investing in index funds?

I wrote up an article on exactly this strategy including how to execute it. The theory is sound, the strategy should work. And additional huge benefit of doing this is avoiding the 30% dividend tax on ...
Glorat's user avatar
  • 71
7 votes
Accepted

Is investing in index futures better than investing in index funds?

It is an interesting idea, but: The minimum capital required for an unleveraged index futures position is prohibitive for most individual investors. For example, a single S&P 500 E-Mini contract ...
nanoman's user avatar
  • 30.2k
6 votes

How are they earning money in the movie "Trading Places"?

Sell 200 at 142. What does that mean? I haven't seen the movie, so I won't try to put anything in story context. "Sell 200 at 142" means to sell 200 units (usually shares, but in this case it would ...
Brythan's user avatar
  • 21k
6 votes
Accepted

Why are there futures for some commodities but not others?

Firstly, steel futures trade on the London Metal Exchange, maybe on other exchanges as well. Perhaps your 32 number was limited to one exchange? I've not researched all the exchanges, but I'd wager ...
Hart CO's user avatar
  • 70.6k
6 votes

Could I make money off of the negative oil price?

There are very large companies that do this every day at high volume. Their processes are extremely efficient, and the price of oil will raise or lower to exactly the right price for these very large ...
TTT's user avatar
  • 47.2k
6 votes

How to calculate the price of 1 Kilogram of each traded-commodity?

"wheat $707 for 5000 bushels (27.2 kg for 1) 1 kg = 0.00519 $, but I buy 1 kilogram wheat from local supermarket for one dollar" It seems you have a misunderstanding of what these prices ...
Grade 'Eh' Bacon's user avatar
5 votes
Accepted

Futures on non-fungible goods

All futures contracts include a specification of the grade and quality of the commodity/instrument being contracted. For example, for CME futures these specifications are laid out the the CME ...
not-nick's user avatar
  • 6,420

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