Stock Market

Trading Places Stock Market – Fake Oranges And The End Of Trading Places Explained

trading-places-stock-market-fake-oranges-and-the-end-of-trading-places-explained

Trading Places Stock Market – Best Deal Right Now?

Time to spread some festive cheer and financial education!

Research and further reading:
http://im-an-economist.blogspot.com/2014/01/short-selling-explained-case-study.html
https://www.investopedia.com/articles/active-trading/042215/how-trade-orange-juice-options.asp
https://www.investopedia.com/ask/answers/difference-between-options-and-futures/
https://www.theice.com/products/30/FCOJ-A-Futures
http://www.dangerouslogic.com/trading_places.html
Edit: Market circuit breakers weren’t introduced until after the film was released, but I guess the concept still stands. Read more about when they were introduced and how they work here: https://www.investopedia.com/terms/c/circuitbreaker.asp

Images:
Christmas tree picture – pngall (CC 4.0)
US congress trading graph – https://www.reddit.com/r/dataisbeautiful/comments/iux4l8/stock_trading_by_us_senators_alongside_the_sp_500/

Website: https://jhebox.com/
Twitter: @JHE_Box

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32 Comments

  1. JHEBox
    July 30, 2021 at 7:30 am

    If you've ventured down to the comment section to tell me "Winthorpe doesn't say 2000, he says…", please only do so in reply to THIS comment thread or else it will be removed. So far I've had people commenting to say it's:

    -20

    -30

    -200

    -2000

    -20,000

    -"Short"
    -"Navels"

    So I'd much rather gather them all in one place and you can debate with each other.

  2. Txx Rxxx
    July 30, 2021 at 7:30 am

    Excellent explanation which has always fascinated me. I actually calculated these profit and loss balances on paper but now this video explains it. There is one more calculation I did. That would be the approximate net worth of the Bates brothers (or at least the liquidation value of their trading account) before they got wiped out. It was based on a presumption of taking the amount of their margin call and multiplying by two.

  3. Keith Outdoors
    July 30, 2021 at 7:30 am

    This was Not the Stock Market, it was the Commodity Market. Two different things.

  4. MrTUBEular10
    July 30, 2021 at 7:30 am

    I about fainted when he said Ray and Donkey.

  5. Blarg Blarg
    July 30, 2021 at 7:30 am

    We don't get great movies like this anymore thanks to the plague of thin skin

  6. SeanP7195
    July 30, 2021 at 7:30 am

    I actually looked up the original Hollywood script and the part where Louis sells is left blank, lol. I guess they don't want us to know. According to IMDB he says "sell 200 April at 142". NPR states it says "sell 30 april at 142". However, most other websites and the closed captioned for the movie say he says "Sell 200 april at 142". Personally, thats what it sounds like to me also. One more thing, I saw another article by a trader who stated the total windfall for the day was 250 million (and he quoted the 200 april at 142 number).

  7. SeanP7195
    July 30, 2021 at 7:30 am

    If they bought more contracts than they sold could they return the following day and buy more up to just under the price they originally sold them for for even more profit?

  8. Dennis Pike
    July 30, 2021 at 7:30 am

    Actually, I think it is easier to explain if one uses the concept of buying stocks. Traditionally, one tries to buy low and sell high. But one can also buy high and sell low. That is what they are doing, they are selling contracts at a high price and buy them back at a low price. The catch is, to buy in the first place one needs cash and margin (aka fancy term for borrowing money on the exchange). That is why the Butler and the girlfriend gave them their life savings to provide money to buy.

    At the end the Dukes have bought high and sold low, so they now owe money for the "Margin Call". Unlike banks, there is no repayment plan, all the money is due at the end of the trading session.

  9. HUNTER HAMILTON
    July 30, 2021 at 7:30 am

    Absolutely BRILLIANT!

  10. Howard Failer
    July 30, 2021 at 7:30 am

    One of the best movies ever made

  11. Lord_Humongous
    July 30, 2021 at 7:30 am

    Stay triggered my snowflakes.

  12. icharlycharly
    July 30, 2021 at 7:30 am

    but how did they get those 2000 contracts?

  13. WhyAmIWearing ARedShirt
    July 30, 2021 at 7:30 am

    $25M in 1983 would be $147M in 2021.

  14. Paul Redinger
    July 30, 2021 at 7:30 am

    Thanks for this.. my frail factory rat brain never understand how this worked. Thanks brother!!!!

  15. Carlos Amselle
    July 30, 2021 at 7:30 am

    The Dukes shouldn't be that mad at Valentine. He put them in Coming To America!

  16. Raymond Meyers
    July 30, 2021 at 7:30 am

    This is basically shorting the orange juice market with illegal insider trading. Billy Ray and Louis should have been arrested.

  17. blissando
    July 30, 2021 at 7:30 am

    Thaaaank you! This has been bothering me since I was a kid

  18. avataz
    July 30, 2021 at 7:30 am

    These days the machines would have been shut off and the Duke Brothers would be given money from the federal reserve, rat bastads

  19. William Herman
    July 30, 2021 at 7:30 am

    It's $252 Million

  20. William Herman
    July 30, 2021 at 7:30 am

    I have read/heard anywhere from $198 Million, to $252 Million, and even as high as $290 Million.

    I personally like the explanation that results in a Net Profit of $252,000,000.

    That. Is. Insane.

  21. K August
    July 30, 2021 at 7:30 am

    Well, I am never going to work on Wall Street, then…

  22. Jeff Bown
    July 30, 2021 at 7:30 am

    Distant 2nd to “die hard”

  23. ONEHITKILL
    July 30, 2021 at 7:30 am

    He said sell 30 for the 142 meaning he is signing 30 contracts with the set price of 142 which means when the price drops they have to buy product like a bat outta hell to honor those contracts netting them millions once they can honor the deal.

  24. Jesse Jimenez
    July 30, 2021 at 7:30 am

    Best explanation out there. Thanks.

  25. ali ali
    July 30, 2021 at 7:30 am

    Basically they bought low and sold high – they just did it in the opposite order you typically think of things

    they sold high because it turns out that price was the peak when everyone thought orange juice would be scarce

    they bought low when the price tanked because people were desperate to unload once they realized orange juice would be in abundance

    they pocketed the difference

  26. Robert Rainer
    July 30, 2021 at 7:30 am

    Two of my most funniest movies. Love These.

  27. Mark Salud
    July 30, 2021 at 7:30 am

    Now I understand how Louis and Billy Ray got rich from the stock market. Thanks for the explanation.

  28. Audberto Velez
    July 30, 2021 at 7:30 am

    thanks…. this is my favorite movie all times.. even saw this movie last nite , and ill watch it again today… lol.. it is indeed a good movie.. classic.

  29. VDHMEDIA Bay Area
    July 30, 2021 at 7:30 am

    Great vid 💪🏾💪🏾Orange

  30. Will Shank
    July 30, 2021 at 7:30 am

    I just have one question and please correct me if these numbers are wrong. Winthorpe & Valentine made a profit of $25 million? And the Dukes lost $394 million? What accounts for the other $359 million?

  31. therealthreadkilla
    July 30, 2021 at 7:30 am

    "inside trading is illegal unless you're rich"

    OR unless you are a member of congress.

  32. velezf216o
    July 30, 2021 at 7:30 am

    GameStop