Ferrari Mailing List: Re: Illinois speed traps

[LarryT (l02turner]

Hi Hans,
I don't doubt you know far more about it than I do - but I was thinking it 
would be the way I used to do it until I lost my "Education Fund" of $3000 
which I had set aside to buy futures - and either end up with more money or 
none.  Naturally I ended up with None. Luckily I didn;t need to add to the 
$3k.

To keep myself from going into the position of going from +$12k to ($30K) I 
set stop losses which got me out the moment it started going against me. 
It's been a few years - IIRC it was "Stop Losses"  we used as protection 
because of my lack of deep pockets.

I believe those who had deep pockets could weather the times when it went to 
neg $30k in your example as they waited (prayed most likely) for the price 
to move back into the positive.   As I said, it's been ~10 years since I did 
that stuff and the memory cells have long since flamed out - but I was able 
to stay in while some of the lower priced markets moved hundredths of 
pennies - but if it was more than $200-$300 against me I bailed.  I suspect 
if I'd made $10s or 100s of thousands I would have made damn sure I 
remembered *every* aspect of the deals.;-)   But typically, I'd bail and be 
left with nothing and the next day the price would rise again.   If I'd been 
able to stay in the market I would have made money instead of losing it.

Typical.  ;-)

Larry T (66 MGB, 74 911, 91 300D)
www.youroil.net for Oil Analysis and Weber Parts
Test Results http://members.rennlist.com/oil
PORSCHE POSTERS!  youroil.net
800-583-8601
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----- Original Message ----- 
From: "Hans E. Hansen" <FList [at] hanshansen.org>
To: "Larry Turner" <l02turner [at] comcast.net>
Cc: "The FerrariList" <ferrari [at] ferrarilist.com>
Sent: Saturday, August 09, 2008 5:57 PM
Subject: Re: [Ferrari] Illinois speed traps


> 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!-
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