Hello!

Hello all!

My name is Britney Holloway, I am a rising senior at Michigan State University studying finance and hopefully after this fall working on a minor in economics. I wanted to start a blog so I can keep track of my calls and reference them in the future. I also wanted to shed some light on commodity futures, people seem to be daunted by the idea of trading especially commodities but it is really not as scary as it seems.

I want this to be an open forum with discussion and questions. If you disagree tell me, if you think I’m correct tell me why. I’m not professional just sharing my personal opinions and research. I want to make it very clear that the statements expressed are opinions if you decide to follow my calls I am not responsible for any monetary loss you may incur. Truth be told if you lost money I’m probably losing money too!

Enough of that let’s get to the good stuff!

First off what are futures contracts?

According to investopedia a future is a contract obligating the buyer to purchase an asset or seller to sell and asset ( ie physical commodity like crude oil or financial instrument like a 10 year note) at a future date and price. Futures can be used to either hedge or to speculate on the price movement of the asset.

What does that all mean?

Hedging is an investment process to preserve values and help reduce risk.

Speculating is picking the direction of the market you either expect the market to go up (go long) or go down (go short)

Let’s put this in some real life terms.

Lets say I am a farmer ( long position) and I want to secure the selling price of a crop at the same time an organic market (short position) will want to secure a selling price to determine profits.  I enter a futures contract to sell at 1,000 bushels at $5 in April. Futures contracts depend on the movements of the market. If a week after the above scenario futures contracts drops $1.00 the farmer loses a dollar and the organic market profits a dollar.

This is a really simplified description but as I make my calls I’ll go into further detail.

Let me know if you have any questions!

Yesterday I made a call on ten-year notes, that’s what all that mumbo jumbo below is.  Basically I expect TYU to go down which is why I went short. Interest rates are so low that it makes more sense to invest in stocks as opposed to notes. When I made the call TYU was at 133’70 by the end of the day it had dropped to about 133’20! Holla! TYU yields $31.25 a tic the bigger the order the more you profit.

God Bless

Brit