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Pastimes : Don't Ask Rambi -- Ignore unavailable to you. Want to Upgrade?

To: JF Quinnelly who wrote (34611)	8/10/1999 8:34:00 PM
From: Ish	Read Replies (1) \| Respond to of 71178

<<I've heard that when a commodity goes against you, you can't get out of your position if the stuff goes limit down each day.>> Grain futures 101. December beans are selling for $4.00. You see a bumper crop coming in and sell December futures at $4.00 figuring you'll buy them back at $3.50 to cover. Things go right and you make 50 cents a bushel on your contract. Lets say you did 50,000 contracts which is low on grain futures. 50 cents x 50,000 = $25,000 profit. Oops, an early frost on September 1st. Beans go to $6.00. You sold 50,000 bu at $4.00. You gotta buy 50,000 bu at $6.00 to sell at $4. A loss of $2 per bushel x 50,000 bushels = $100,000. It's a bid and asked situation. No bids and the selling price goes to 000.0000. No one wants to buy and you can't sell. Now take your 50,000 bu of beans at $4 and try to cover if they hit $9 on the sell. Makes being a postal carrier seem safe doesn't it?