A harsh introduction to futures
The Minneapolis Grain Exchange in 1939. Photo from Wikipedia.
In high school my best friend’s dad, Jerry, worked at the Minneapolis Grain Exchange. He would sit at his old laptop computer during dinner and watch the markets and at various times try to explain to me what all of the colors, lines, numbers, and graphs meant. I did not understand. He said that it used to make a lot more sense, when going to the grain exchange building actually mattered- now you can trade on the Minneapolis Grain Exchange from anywhere, just by logging on. Back then though, the men in the trading room would actually buy and sell by yelling and sometimes discussing but mostly yelling out their prices. At least according to Jerry. I still never quite understood what he did; he once almost had his grain trade delivered to the house- 25,000 bushels of corn- to a small house in the middle of the city. This, I understood, was not good. Luckily that didn’t happen and the corn got a buyer and Jerry didn’t have to turn his house into a silo.
I start with this story to explain that I am starting from zero in my understanding of commodity markets, futures trading, and grain exchanges. My best frame of reference while beginning this trading game is to tell you about my high school friend’s dad. It’s truly not that impressive. So with that stated, this process should be an interesting and challenging learning experience. I am sure I will be flailing around trying to understand what shorting is, why the blue line is so squiggly, and simultaneously worrying about my corn’s future and my own.
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