FRE501 Trading Lab

Hi!,

This week I traded wheat, but I lost -500 USD. I read on the news that there has been bad weather in Russia, and since I have herd from other classes that Canada has also struggled recently with its production I thought that the price was going to increase. However, it did not happen and in fact in plummeted very quickly, so I did not hold those contracts for too long and sold them before I continued to lose more.

After that, I continued to research about the prices by looking at historical price charts, and I saw the price of timber was increasing. Also I read on the news that the housing market has recovered very well in the US since the recession and is now one of the reasons the Federal Reserve might increase later this year its interest rate. Therefore, I bought contracts of timber.

Moreover, I herd from some of my classmates about the gains they were having in commodities like cotton and rice, I looked at their historical prices, and yes they were increasing, so I bought sugar and cotton. However, both of them have been very volatile and I was not willing to take too much risk given the bad experience I had with wheat, so as soon as their prices decreased I went short.

José