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#1
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Re: BFI November [censored] thread
basic question:
stock/commodity XXX. current price $1000. i want to invest/long. futures (?) price is $1020 for FEB08. if at februay 08, it is then $1020, have i made any money? is it a case of being told a price and you decide whether it will be higher or lower? take gold for example. price $815. FEB08 price $825. i can roll the daily price, whereby i am effectively investing (with leverage, at a 7% annual cost). Or i can go for the FEB08 option. but if gold was at $825 in FEB08, using the rolling daily method i make profit on the $10 rise, whereas on the futures method i havent made anything? is that correct? many thanks if you can help. |
#2
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Re: BFI November [censored] thread
no you havent. You need to reward the guy who holds the commodity for the time value of money so he gets the 20$ or 2% and borrowed the money for 20$ at that rate.
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#3
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Re: BFI November [censored] thread
cool thanks ahnuld. think ill keep the daily rolling position rather than switch to futures.
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#4
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Re: BFI November [censored] thread
Ahnuld (or anyone),
Where do you do most of your research on macro ideas like gold and oil? Economist, WSJ, recent news? For stocks, is recent news + industry news + annual reports a good start? How did you get an understanding of the instrument options you can use? |
#5
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Re: BFI November [censored] thread
[ QUOTE ]
cool thanks ahnuld. think ill keep the daily rolling position rather than switch to futures. [/ QUOTE ] You'll have made $10 but you'll also have lost on financing. |
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