Studying futures trading. Any experiences to share?
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March 21, 2010 6:16 p.m. mk2mer New Reader
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March 21, 2010 6:48 p.m. Dr. Hess SuperDork
Yeah. The smartest thing you can do is do something else.
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March 21, 2010 6:56 p.m. VanillaSky Reader
Watch "Trading Places" with Eddie Murphy and Dan Aykroyd.
"...And last but not least, frozen concentrated orange juice."
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March 21, 2010 7:08 p.m. mk2mer New Reader
Dr. Hess wrote:
Yeah. The smartest thing you can do is do something else.
Personal experience?
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March 21, 2010 7:13 p.m. JG Pasterjak Production/Art Director
Best explanation I've ever seen here.
jg
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March 21, 2010 7:22 p.m. z31maniac Dork
Invest in Pork Bellies, everyone loves Bacon.
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March 21, 2010 8:46 p.m. P71 SuperDork
Don't. Seriously
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March 21, 2010 8:50 p.m. Osterkraut Dork
P71 wrote:
Don't. Seriously
While I'm inclined to agree with you this time, didn't you once advise against investing in stocks at all?
Edit: Yeah.
P71 wrote:
I absolutely do not recommend stocks or any other unsecured investment, not even mutual funds. If you truly want to look at alternative investments I would recommend Treasury Bonds and physical assets
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March 21, 2010 8:54 p.m. mk2mer New Reader
P71 wrote:
Don't. Seriously
Not so much learning. Just a bunch of "don't, don't, don't, etc."
Nevermind.
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March 21, 2010 9:19 p.m. aircooled SuperDork
If I remember correctly you will bet that some commodity that many other people know a lot more than you about will go up or down. Not only will you pay a hefty commission but you have a limited time for that commodity to go the way you predicted. Unless you have some insane inside knowledge about the commodity...
Don't, don't, don't...
The best way to make money off of futures trading is to sell them to some other fool who thinks they can make money off of them.
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March 21, 2010 10:00 p.m. P71 SuperDork
Osterkraut wrote:
P71 wrote:
Don't. Seriously
While I'm inclined to agree with you this time, didn't you once advise against investing in stocks at all?
Edit: Yeah.
P71 wrote:
I absolutely do not recommend stocks or any other unsecured investment, not even mutual funds. If you truly want to look at alternative investments I would recommend Treasury Bonds and physical assets
Because 99% of "investors" do not purchase stocks for their intended usage, which is to collect dividends. Buying and selling stocks without that in mind is pointless and you stand a very, very good chance of getting burned. It would be like buying tires and not using them, they will rot.
Futures are even worse than stocks because there is absolutely no security to them whatsoever, they are literally not worth the paper they are printed on. They aren't exactly legally binding and the price can always be re-negotiated. So betting on whether or not that price is up or down is pretty ridiculous. If you are not the company providing the product or buying the product then why in the heck would you be involved in the transaction???
Invest in something you truly know (like cars for us GRM'ers), not some product because a bobblehead on the TV news yelled at you to do it.
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March 21, 2010 10:27 p.m. Osterkraut Dork
Aren't you paid to educate "investors" on buying stocks to collect dividends, then, instead of issuing blanket statements that are hugely financially unsound?
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March 21, 2010 11:07 p.m. stroker Reader
It's a very easy way to go bankrupt really, really fast.
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March 22, 2010 1:12 a.m. BoxheadTim HalfDork
P71 wrote:
Futures are even worse than stocks because there is absolutely no security to them whatsoever, they are literally not worth the paper they are printed on. They aren't exactly legally binding and the price can always be re-negotiated. So betting on whether or not that price is up or down is pretty ridiculous. If you are not the company providing the product or buying the product then why in the heck would you be involved in the transaction???
Errr, sources, please? I assume we're talking about exchange-traded futures here that have well understood properties, deliver options and the contractual side is also well understood.
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March 22, 2010 1:25 a.m. BoxheadTim HalfDork
The question that nobody asked - Futures trading for someone else (ie as an employed trader) or for yourself as a daytrader out of your spare bedroom? And what is it you're trying to achieve? Hedging another position? Plain trading in the hope you get it right and GS doesn't?
I'd skip the latter unless you've got the experience and/or are good at building models you can follow; the former should include the necessary training and risk controls so it'll be more a question if you can handle the environment and the long hours that tend to come with working at a trading operation. BTW, I'm talking about working as a proper employee of a trading firm, not one of these "pay to play" places that I'd avoid.
If you do decide to go at it yourself the most important points to keep in mind are:
- Without proper risk controls you're flying blind. You have to have those, just ask Dick Fuld. Although he probably still thinks it was the black helicopters
- Don't ever gamble more than you can afford to lose. And keep space in the spare bedroom if you forget to roll over the position and have to take delivery of that beef contract.
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March 22, 2010 1:32 a.m. GlennS Dork
Dr. Hess wrote:
Yeah. The smartest thing you can do is do something else.
The only time this isn't true is when you have inside information.
And even then you probable shouldn't.
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March 22, 2010 9:24 a.m. P71 SuperDork
Osterkraut wrote:
Aren't you paid to educate "investors" on buying stocks to collect dividends, then, instead of issuing blanket statements that are hugely financially unsound?
Show me one "investor" who has made money in stocks and I can show you 100 who lost everything. Investing is simple, don't do it if you don't understand it. 99% of Americans have no idea what stocks are let alone how they work. Somebody has to lose money at the game for somebody else to make it. I teach people what stocks are, and how to buy them for dividend returns over a long period with a sale at the end to recover the initial buy-in. Speculation and short-sales are not wise investments. Notice that the big names (Buffett et al) don't do it either.
Of course you could just keep making keyboard attacks because you think the TV news guys yelling BUY!!!! at the top of their lungs are right.
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March 22, 2010 10:10 a.m. Dr. Hess SuperDork
As we branch off topic (Commodities/Futures) and into Stocks, I'll comment on the existing markets:
The way it's supposed to work (what they tell us): Company A needs capital to do something. Sells stocks. Stock buyer owns part of the company and is intitled to a portion of the profits. Stock buyer can vote his shares for decisions guiding the company.
The way it is: Company A sells stocks. Stock buyer owns nothing but paper, and that paper doesn't even exist, really. Stock has no real voting power because "preferred shares" count 100X as much in voting and those shares are held by a small group that don't sell them. "Board of Directors," CEO, etc. look at the numbers: Sold 100 monitary units (millions, billions, hundreds, whatever), costs were 90 units, profit 10 units. Give out 9 units in bonuses to The Board, CEO, VP's. Take other 1 unit and split that in half, use one half unit for the good of the company (pay down debt before you borrow more, buy something, fix up the executive bathroom and racketball court). Take the other half unit and distribute that to the company stockholders. Eventually, from poor management, the company fails, executives bail on golden parachutes, debt holders (bond holders, banks) take whatever assets are left, stockholders get nothing, not even paper to hang on the wall.
Yeah, BUY BUY BUY!!! Hurry, now's the time while the market is (down, rising, falling, whatever)!!!
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March 22, 2010 10:15 a.m. P71 SuperDork
Nailed it right on the head Dr. Hess
Ask GM stockholders what they think of normal shares...
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March 22, 2010 11:35 a.m. Karl La Follette HalfDork
Buy a junk car for , fifty bucks > pull battery , radiator , cat converter , wiring harness , drain oil use for chain saw bar , drain gas make fires , sell all parts you can on craigslist , scrap car at recyclers after stuffing with as much steel you or your neighbor have around . Profit roughly $500 on $50 dollar investment 2 month turnaround .You have just run the copper , platinum, oil , steel , lead . aluminum markets
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March 22, 2010 4:44 p.m. Osterkraut Dork
P71 wrote:
Of course you could just keep making keyboard attacks because you think the TV news guys yelling BUY!!!! at the top of their lungs are right.
I don't have cable...
You recommended previously to "absolutely" never buy stocks (and more ridiculously mutual funds) and now you're saying do it for the dividends? Something's not right, but hey I'm a gullible TV-educated keyboard warrior, pay me no mind!
