Posted by: usset001 | May 6, 2013

Commodity Challenge Tuesday Tip: Bulls vs. Bears

I’ve taught a course on futures and options many times. The math is straightforward but many students struggle with the lingo. Let’s talk about bulls and bears, and longs and shorts.

A market bull is some who thinks prices are going higher. Bulls use their horns to push prices higher. Bears think prices are going lower – they use their paws to beat prices down. If you are bullish, you look to be “long” the market – you look to buy futures. If you are bearish, you look for ways to “short” the market – you look to sell futures.

In Commodity Challenge you play the role of a grain producer and you have an ownership position – a long position – when the game begins. Your job is to maximize revenues using futures and options as risk management and pricing tools.

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