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09-07-2017 11:19 AM
trying to start to think like a trader........
how about these trades ?
go long on orange juice........with a massive hurricane heading for flordia......wouldn't it hurt those orange groves ?
would it break them down, etc, so that there would need to be be replant, and take several years to rebuild ?
or would orange juice supplies from other parts of the world be enough to cover .
go long osb lumber.....with all the plywood used to cover windows in tx and flordia, and all the rebuilding
that is going to need to take place.....
lumber up 5.90
OJ up 5.50
09-07-2017 12:34 PM
That's a good exercise. It's great to try to understand the thought processes of others. Here's some more food for thought on traders, or in this case, speculators. First, you don't want to buy the physical product, first because you probably don't have enough money to buy enough of a position to make a meaningful profit, and second, because you probably don't have the storage space for it and the transportation methods to move it around. That leaves options. You could buy a call, hoping the price goes up beyond what is already anticipated, and sell for a big profit. But options also have expiration dates, so you have to know when to pull the trigger and sell the option before it expires worthless. If you are already really good at buying corn options and selling for a profit, you could give this a try. But don't spend money on these options that you can't afford to lose 100%, because Murphy could get you and Irma could still go right up the Florida Atlantic coast, sparing the state from the worst of the hurricane (since the "bad" side is the one to the right of the eye in the direction of travel).
09-07-2017 03:02 PM
You are thinking too much my friend. Just pick one market, select a price level that you want to buy or sell and live with it. Your price level has to be well thought out and with the global fundamentals in mind.
09-07-2017 04:30 PM
you're a couple of steps behind on the chess board, el cheapo
for the items you mentioned, you want to be finding a place to be short a market that is getting overdone to the upside
these are "catching a falling knife" markets....difficult to trade....highly speculative vs. "investing: