Ferrari Mailing List: Re: Illinois speed traps

[Hans E. Hansen (FList]

Uh, Larry, you don't understand futures.  (It's what I do for a living...)
Those guys "holding long contracts" are not currently "holding
worthless pieces of paper", they are hugely underwater.  You can
lose far, far more than your initial investment in futures.  A contract
bought in early July would show a loss of $30,000 on a $12,500
investment.  In other words, the broker has called up numerous
times wanting more money to cover those losses.  So you don't
go from $12,500 to zero, you go from $12,500 to -$30,000.

Hans.  (Who was part of the problem, holding energy futures
during the run-up.)

On 8/9/08, LarryT <l02turner [at] comcast.net> wrote:
> Ken Wrote <<The price of the nearest crude oil futures contract
> closed at $146.60 in early July. It closed at $116.93 on Wednesday.
> That's a 20.2% decline... and Wal>>
>
> All those speculators who were holding long contracts gambling on the "Sure
> Thing" that oil prices would keep going up and now holding worthess pieces
> (virtual pieces) of paper most thought would be worth a small fortune!   It
> still may be worth something if the price goes back up soon enoguh but
> there's some nervous people out there!-
>