| BUSINESSWEEK ONLINE : JANUARY 25, 1999 ISSUE | ||||||||
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| PERSONAL BUSINESS
How to Get Some Practice Within six months, the Dow Jones industrials will plunge 15%. Long-term interest rates will again slide below 5%. And, by the way, fears of winter damage to the Florida orange crop are overblown, and hog prices can't get lower. I believe these things to be true. In fact, I was willing to put money on them--pretend money, that is. So on Jan. 5, I signed up for the Auditrack simulated futures trading program offered through the Chicago Board of Trade (www.cbot. com). The $19.95 simulation lets you learn the ropes before you put up real money. I chose the CBOT because it gave me unlimited trades in the Dow Jones and U.S. Treasury bond contracts. Non-CBOT contracts, like lean hogs and frozen orange juice, cost 90 cents per trade. All my trades were market orders, which go through at the current price and remain open until I buy or sell the same contract. I sold two Dow Jones March contracts, worth 10 times the index, at 95.44, which means the market expects the Dow will trade at 9544 in March. When the contract matures on the third Friday of March, I will profit if the Dow has fallen below 9544. I also bought a June bond contract worth $126,040, the price of a $100,000 30-year Treasury bond at 8%. I expect hog prices to rebound quickly, so I bought two February contracts (80,000 pounds of hogs) at 36.57 cents per pound. I sold a March orange juice contract (15,000 pounds) at 98.75 cents per pound. As of Jan 11, my short on the Dow was down $2,920; my long position in bonds was down $1,875. My short on orange juice was off $540; the hogs contract was up $2,100. So far I'm out $3,235. But I still have time for my trades to prove their merit. By Andrew Osterland EDITED BY AMY DUNKIN _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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