Two beginner questions about futures:

[oldtime]

corn hits $7. The farmer likes that price and asks the buyer to buy it now for delevery in Dec.

The buyer thinks $7 is high and says, "No, I'll buy it in Dec at the mkt price.

The speculator steps in and buys the corn from the producer at $7 and hopes the price goes up.

If it goes up both the farmer and the buyer are pissed.

If the price goes down the speculator is pissed.

 

[TradeSparrow]

Quote from oldtime:
The speculator steps in and buys the corn from the producer at $7 and hopes the price goes up.

Thanks. That's really helpful. Prior to your explanation, I was still a little fuzzy as to why the speculator stepped in.

Quote from emg:
can figure this out?

Maybe I'm just thick, but I don't see how that is helpful at all.

emg, how do you personally use that data to make trading decisions? Any insight would be helpful.

For example, how would you use the following cash price data for wheat:
http://www.ers.usda.gov
Excel Data Sheet from the site.

 

[emg]

Quote from TradeSparrow:

Thanks. That's really helpful. Prior to your explanation, I was still a little fuzzy as to why the speculator stepped in.


Maybe I'm just thick, but I don't see how that is helpful at all.

emg, how do you personally use that data to make trading decisions? Any insight would be helpful.

For example, how would you use the following cash price data for wheat:
http://www.ers.usda.gov
Excel Data Sheet from the site.

If u want to learn more about agriculture business, u should get a agriculture business degree. I recommend Cornell University:

Cornell is consistently ranked in the top fifteen universities of the world. In 2010 Cornell ranked 14th in the Times Higher Education World University Rankings and 15th in the QS World University Rankings

http://www.cals.cornell.edu/

The New York State College of Agriculture and Life Sciences (abbreviated to CALS or Ag School) is a statutory college at Cornell University, a private university located in Ithaca, New York.[3] With about 3,100 undergraduate and 1,000 graduate students enrolled, it is the third-largest college of its kind in the United States and the second-largest undergraduate college or school at Cornell. It is the only school of agriculture in the Ivy League.


If enrolling at cornell university, u should get agriculture, mathematics, and computer engineer with a minor degree in financial math.


Imagine u have those degrees, u will be a rockstar and never ever ask questions in elitetrader.com forum.

Fail to qualify this results:


More than 90% of small traders lose. They just lose!!

 

[TradeSparrow]

Quote from emg:

u should get agriculture, mathematics, and computer engineer with a minor degree in financial math.

Thanks for the information. It gives me a new set of questions, if you wouldn't mind:

I'm very interested in knowing why exactly are you recommending these fields to me? In particular, what is taught in agriculture, computer engineering (versus computer science, if there is a difference), and financial math that will be so helpful? Could you elaborate on these fields and why you think I ought to study them? I'll do my own research, but I'd like to hear from you as well, since it seems you've "been there, done that."

I realize programming can be useful for trading, especially when designing indicators and automated trading systems. The language for indicators in ThinkorSwim is not very difficult, however. I'm not very interested in automating my trading. I can think of at least one source (Alexander Elder's books) that discourage this style of trading. Elder seems to know what he's talking about, so I'm not sure I want to invest so much time in creating a system that might not work very well.

Are there other reasons for learning a lot of comp engineering for this field?

Also, since you're recommending these fields in the first place, can you recommend any resources that I may begin looking into these fields? I feel it better to be somewhat familiar with these fields if I decide to attend a university for them.

If you can't recommend anything, I'll do a few searches on Amazon and see what I can find.

Lastly, if you don't mind my asking, why do you recommend Cornell? By your response, it feels like you're a recruitment officer. Granted, the school must be good, but anyhow, is this where you were educated? If so, maybe we could talk about the program in more detail by Private Message if you have the time.

And again, thanks a lot. Your reply was extremely helpful in terms of giving me new roads to pursue.


Lornz:
By the way, I read the CBOT Handbook of Futures and Options and it was incredibly comprehensive. Thanks very much. I'll start on the CBOT one shortly.

 

[Lornz]

Quote from TradeSparrow:


Lornz:
By the way, I read the CBOT Handbook of Futures and Options and it was incredibly comprehensive. Thanks very much. I'll start on the CBOT one shortly.

No problem. It's nice to see someone put in the work, most beginning traders just put up a few worthless indicators on their screens and expect to become millionaires over night..

 

[Lornz]

I was checking on some math related problem I had, and this came up as a featured video:

<object width="640" height="360"><param name="movie" value="http://www.youtube.com/v/H9UEZdAnnt8?version=3&amp;hl=nb_NO&amp;rel=0&amp;hd=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/H9UEZdAnnt8?version=3&amp;hl=nb_NO&amp;rel=0&amp;hd=1" type="application/x-shockwave-flash" width="640" height="360" allowscriptaccess="always" allowfullscreen="true"></embed></object>

I thought it was worth posting.
Please note that this is a forward contract, not futures. The difference being that futures are standardized and exhange-traded. But from reading the various posts on this thread, it seems there have been overlapping (even if unintentional) discussion about the two...

 

[oldtime]

Quote from Lornz:

I was checking on some math related problem I had, and this came up as a featured video:

<object width="640" height="360"><param name="movie" value="http://www.youtube.com/v/H9UEZdAnnt8?version=3&amp;hl=nb_NO&amp;rel=0&amp;hd=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/H9UEZdAnnt8?version=3&amp;hl=nb_NO&amp;rel=0&amp;hd=1" type="application/x-shockwave-flash" width="640" height="360" allowscriptaccess="always" allowfullscreen="true"></embed></object>

I thought it was worth posting.
Please note that this is a forward contract, not futures. The difference being that futures are standardized and exhange-traded. But from reading the various posts on this thread, it seems there have been overlapping (even if unintentional) discussion about the two...

oh, now I get it, so if apples go over 20 cents I need to go short and if they go under 20 cents I need to go long.

All I need to do is hang out where farmers and pie makers hang out and observe.

(You can observe a lot just by watching.)

 

[NasiWarrior]

I will highlight the role of the Futures Exchange & how it relates to many of the traders that will be reading this:

1. The primary function of the Exchange allows commercial operators to pass price risk onto speculators.

-or-

2. The primary function of the Exchange allows speculative operators to assume the price risk of commercial operators

Regards.

 

[cgstewart92]

Be careful not to confuse forward contracts an futures contracts. In regards to your second question, no one knows wht the price will be...

Cme group has a good video about what they (futures exchanges) do on there home page.