Clever boss.
Trading commodities, you use futures to protect yourself.

Put simply, when you buy physical stuff, you sell futures. When you sell physical stuff, you buy futures. If the price changes, you win on one, you lose on the other. They balance each other out. It's called hedging.

My old boss didn't quite get it. He would carefully analyse the results from one side or the other, but never both together.

He'd come storming into the office, shouting that we'd lost $4.5 million last year on trading activities. We'd point out that we made $4.5 million on the futures side.

His answer? "So why don't we just do futures??".

Just to clarify, we could just as easily have lost 4.5mm on futures, but made it on the physical stuff. Then if we'd only done the futures as he wanted, we really would have lost $4.5mm

In the complicted version, we (sometimes) make a profit doing all this.
(username failed moderation, Wed 29 Feb 2012, 15:17, 23 replies)

This sort of thing
is a useful reminder of what bullshit capitalism really is.
( monster munch person, man, woman... camera... TV?, Wed 29 Feb 2012, 15:21, closed)

See signature for details, right?

( Je suis un vagabond is an unfunny, up your own arse middle class knob, Wed 29 Feb 2012, 15:27, closed)

In keeping with the theme,
I should make it clear that I'm not trading the actual ownership of monster munch.
( monster munch person, man, woman... camera... TV?, Wed 29 Feb 2012, 16:13, closed)

Well that answer is a usefull reminder of the fact you
have no idea what you're talking about.

We fill ships with food, and deliver it to people. Several million tons per year.

Watching Trading places a couple of times doesn't qualify you to comment.
(username failed moderation, Wed 29 Feb 2012, 15:28, closed)

Not really.
I understand how the capitalist system works but, strip back enough layers, and you find there's nothing underneath.
Futures trading may be required for you to carry out your business, but that doesn't stop it being bullshit.
( monster munch person, man, woman... camera... TV?, Wed 29 Feb 2012, 15:34, closed)

Er, yeah it does.
It's what allows a farmer to sell his crop 6 months before he planted it, and get finance to do so.

It's what allows companies like ours to buy large stocks without the risk of losing our arses.

In some cases, it's what allows some Dickhead in a 2 grand Herbie Frog suit to piss your Grannies life savings away, in a drunken frenzy.

2 of those are good. One is bad. Do you know which one it is?
(username failed moderation, Wed 29 Feb 2012, 15:39, closed)

I'm not arguing that it isn't necessary for the system to work.
Selling something that you've yet to produce? I can accept that. Selling on that purchase? Bullshit.
Basing your business on the trading of futures? Compound bullshit.
( monster munch person, man, woman... camera... TV?, Wed 29 Feb 2012, 15:49, closed)

What's the difference?
See, now we're getting complicated, and you'll lose track.

In your world, a Brazilian wheat farmer should be selling his crops directly to a Tanzanian grain miller, right? Cut out the bullshit middlemen.

I could list 100 things that neither of them are remotely capable of doing. It would never happen. That's why it goes through a trading company, becuase we can.

OK, and to cover the edit - if you don't get why we trade futures, well, you don't get it. It couldn't happen without it, has been so for several hundred years. The bullshit is speculation, what we do is exactly the opposite to that.
(username failed moderation, Wed 29 Feb 2012, 15:55, closed)

Again, not arguing that it isn't necessary for the system to function.
Doesn't mean I'm happy with the system.
Glad to hear your not speculating, though. I believe that's where the trouble really starts (back to Trading Places).

Can we do money, now? I've yet to be convinced that money is anything other than a collective delusion, but my economics lecturer was never keen to explain to me otherwise.

ps. Come the revolution...[etc.]
( monster munch person, man, woman... camera... TV?, Wed 29 Feb 2012, 16:09, closed)

Not really my thing.
We often borrow it, and we sometimes give it to people as advances for goods we buy that are still growing.

We sometimes do currency operations, I'm doing that this afternoon.

Otherwise, it's just something I don't get paid enough of. Same as everybody else.
(username failed moderation, Wed 29 Feb 2012, 16:12, closed)

Yeah, that hasn't helped.
Nevermind, I'm about to find myself with a negative quantity of delusion, anyway.
( monster munch person, man, woman... camera... TV?, Wed 29 Feb 2012, 16:14, closed)

What happens when the farmer refuses to deliver the goods he's already sold?

( Lord Keeps meaning to procrastinate., Wed 29 Feb 2012, 17:38, closed)

Contract collapses I suppose
That and a massive legal challenge. If that fails the contract chain falls apart.
(Dan dan dan They tik urh jerbs!!!, Wed 29 Feb 2012, 17:45, closed)

Lawyer feed.
Yay.
( monster munch person, man, woman... camera... TV?, Wed 29 Feb 2012, 17:53, closed)

Fascinating.

( Amorous Badger NAKED BEA ARTHUR PHOTOS 4U, Wed 29 Feb 2012, 15:23, closed)

It is, isn't it?
Did I tell you about the time he did a 'by customer' analysis, and decided we should stop working with the ones we didn't make money on?

Want to take a guess at why that's a stupid thing to do?
(username failed moderation, Wed 29 Feb 2012, 15:31, closed)

so you sell time machines then or something?

(TheManWithThePlan cussed your mum on, Wed 29 Feb 2012, 15:30, closed)

anybody wanna buy a future from me?
only 1p per minute, large orders may take several years to deliver
(Quintno EXPERIMENT RUINED CANCELLED, LEFT 4EVER, Wed 29 Feb 2012, 15:43, closed)

I think I'll short that one

(username failed moderation, Wed 29 Feb 2012, 15:58, closed)

Ooohh.
So you're a banker. I see.
All falls into place now.
(Misery McUglywife an attention seeking sociopathic fuckstain., Wed 29 Feb 2012, 21:43, closed)

Which part of physical commodity trader
is it you're struggling to understand?

Maybe it was the bit about how we 'We fill ships with food, and deliver it to people' that made you think I work in a bank, 'cos that's what most banks do, isn't it?
(username failed moderation, Thu 1 Mar 2012, 8:42, closed)

mind did once
but it got better
(Monkeystrumpet monkey. Monkey, MONKEY!!!, Thu 1 Mar 2012, 9:50, closed)

b w

The comedy potential of strikethrough text, is quite literally without limits.
( monster munch person, man, woman... camera... TV?, Thu 1 Mar 2012, 10:11, closed)