Trading Futures

[blue-eye-boy]

Hope I can get more info on something completely new to me. I'm in the meat industry, understanding the industry inside and out.

One of the companies we buy from, quite a large, and fast growing company, recently listed on the JSE, so I was told friday. The sales rep doesnt have much info for me, said theres a launch next week, thereafter he can give more info.

He told me that this is called "futures", works the same as buying grain, things like that, this just with meat.

I need more info, how to invest on this, how to buy, things like that. Where can I get more info, how do I track something specific like this, just to do some tracking before I get into this.

Thanks a mil.

 

[blue-eye-boy]

The company is Vencor Holdings.

 

[FrankieK]

Do you want to trade futures to make money or to actually get the product (I assume meat) at a specific price for a specific delivery?

 

[agentrfr]

Are you asking how futures work, or asking how to make money with them, or how to actually use them not just as an analytical trader?

 

[blue-eye-boy]

Do you want to trade futures to make money or to actually get the product (I assume meat) at a specific price for a specific delivery?

It will be to make money, nothing to do with the actual product. The idea is, as with other commodities, buy low, sell high at the right time. Because Im in the industry, and know first hand what prices do weekly.

 

[blue-eye-boy]

Are you asking how futures work, or asking how to make money with them, or how to actually use them not just as an analytical trader?

Im completely new with this, I need to know where to look to track prices, how to buy and sell. I suppose the money making part is buy low, wait and sell high. Or am I missing something?

 

[Messugga]

Im completely new with this, I need to know where to look to track prices, how to buy and sell. I suppose the money making part is buy low, wait and sell high. Or am I missing something?

I'm pretty sure you're missing something. What, in your understanding, does the price of meat and your interest in trading in futures on meat, have to do with the company listing?

 

[blue-eye-boy]

I'm pretty sure you're missing something. What, in your understanding, does the price of meat and your interest in trading in futures on meat, have to do with the company listing?

Im not sure yet. I was told they listed, and that it is a new thing, this meat futures. If it is like that, or not, is not my issue. I just need to be steered in the right direction to learn how this works.

 

[Messugga]

Im not sure yet. I was told they listed, and that it is a new thing, this meat futures. If it is like that, or not, is not my issue. I just need to be steered in the right direction to learn how this works.

Vencor holdings isn't listed on the JSE, as far as I can tell. In fact, looking up the company's address, it's a farm. There's 0% chance that they're listed on the JSE, if that's the case.

Futures trading on meat has zero to do with a company. You're trading in meat, being treated as a commodity, the same as you can do with wheat or other farm produce. This is typically done on an Agri trading desk.
With futures, you have the ability to sell based on a future commitment to buy, and vice versa. What this allows you to do, is profit on the movement of the market, whether its movement is bullish or bearish. It's also a pretty good way to lose your shirt if you don't know what you're doing.

 

[blue-eye-boy]

Vencor holdings isn't listed on the JSE, as far as I can tell. In fact, looking up the company's address, it's a farm. There's 0% chance that they're listed on the JSE, if that's the case.

Futures trading on meat has zero to do with a company. You're trading in meat, being treated as a commodity, the same as you can do with wheat or other farm produce. This is typically done on an Agri trading desk.
With futures, you have the ability to sell based on a future commitment to buy, and vice versa. What this allows you to do, is profit on the movement of the market, whether its movement is bullish or bearish. It's also a pretty good way to lose your shirt if you don't know what you're doing.

Okay thanks. The guy told me about the launch next week, so maybe thats when they will be listed.
They are situated on a farm, but really not just some dinky toy setup. They supply all over the country, and have accreditation (spelling?) to supply overseas. So if they're not yet, I think they will be listed soon.

 

[Messugga]

Okay thanks. The guy told me about the launch next week, so maybe thats when they will be listed.

Again, highly doubtful. And even if they do list, what does it have to do with futures trading of meat? Are they going to run a futures index for meat? Wouldn't touch that with a barge pole myself. This entire thing sounds super dodge to me.

 

[blue-eye-boy]

Again, highly doubtful. And even if they do list, what does it have to do with futures trading of meat? Are they going to run a futures index for meat? Wouldn't touch that with a barge pole myself. This entire thing sounds super dodge to me.

Just edited my post.

 

[Deleted member 83147]

Im not sure yet. I was told they listed, and that it is a new thing, this meat futures. If it is like that, or not, is not my issue. I just need to be steered in the right direction to learn how this works.

Now I've heard it all...

 

[Messugga]

Okay. Anyway, futures. Go read this: beginners guide to futures trading.

Investopedia is pretty comprehensive and explains things in a simple manner.

 

[blue-eye-boy]

Now I've heard it all...

And here I thought someone would just steer me in a direction to get more info. Please read my first post, and see that i said Im new to this, and want to learn. So get on you fckn high horse and fck out of tjis thread pls. Grown ups are talking here.

 

[Dude Crush]

So even if the company lists, it's share price will not fluctuate with "normal" variations in the price of meat. The return u can earn trading the company's equity (shares) is completely separate to making money off the fluctuations in meat futures.


There's no easy way to learn financial markets other than buying textbooks with structured learning such as university texts. U can Google stuff but the volume of info you'll find makes it difficult to sift through.

I would suggest trying to enrol for a short course at an established place of learning. It's a solid investment in yourself if u can find around R20k for it.

Unfortunately, with a topic as complex as this one, there's no easy way. Financial markets are driven by sentiment (emotions) as well as information... To make money, u need to learn the art of navigating both. I wish I had a more concrete answer for u, but I hope this is at least a little helpful.

 

[blue-eye-boy]

Okay. Anyway, futures. Go read this: beginners guide to futures trading.

Investopedia is pretty comprehensive and explains things in a simple manner.

Thanks, now I have some place to start. Thanks a million.

 

[blue-eye-boy]

So even if the company lists, it's share price will not fluctuate with "normal" variations in the price of meat. The return u can earn trading the company's equity (shares) is completely separate to making money off the fluctuations in meat futures.


There's no easy way to learn financial markets other than buying textbooks with structured learning such as university texts. U can Google stuff but the volume of info you'll find makes it difficult to sift through.

I would suggest trying to enrol for a short course at an established place of learning. It's a solid investment in yourself if u can find around R20k for it.

Unfortunately, with a topic as complex as this one, there's no easy way. Financial markets are driven by sentiment (emotions) as well as information... To make money, u need to learn the art of navigating both. I wish I had a more concrete answer for u, but I hope this is at least a little helpful.

Thanks for thd info, thats why I will make 100 percent sure, before I start.

 

[FrankieK]

There are a few things that make futures trading not for amateurs.
1. Leverage. Futures contracts are leveraged. You can lose more than you have.
2. Settlement type. Almost all commodity futures contracts are physical settlement. If you buy one contract of oil you end up with 1000 barrels of the stuff if you don't sell before contract expiry.
3. Term structure. Front month, second month, third month etc. contracts are priced differently. If you are forced to sell your contract to avoid delivery you might have to buy the next contract at a higher price. You can always roll it forward but now you bring in something called contango and backwardation.

Look at the contract specifications for Live Cattle: http://www.investing.com/commodities/live-cattle

Look at Contract Size, Settlement and Point Value. The cost of one contract is about $133 but every dollar that the price moves the contract value moves $400. That is 400:1 leverage. You spend $133 to buy a contract and before you know it you are down $800 if the price drops to $131. You can't wait for the price to come back because the contract will expire. Either you sell for a loss or you are the proud owner of 40 000lbs of cattle.

Look at Messugga's links. Good info. But caveat emptor.

 

[Deleted member 83147]

And here I thought someone would just steer me in a direction to get more info. Please read my first post, and see that i said Im new to this, and want to learn. So get on you fckn high horse and fck out of tjis thread pls. Grown ups are talking here.

Jesus, calm down.

It was clearly a joke :wtf: