Futures and options trading simulation essay
AREC 313: The Economics of Futures Markets Futures & Options Trading Simulation
Essay (60% of Assignment) – Due December 2, 2019 After concluding the trading simulation, draft a three-page paper (at least 1,000 words) that analyzes your trading performance. Upload your pdf to the course D2L site.
1. Where possible, refer to concepts covered in class. For example, did you employ technical analysis or fundamental analysis? Were you ever caught off guard by contracts expiring?
2. When looking for evidence to cite to in order to explain price moves that affected your trades, consider the following sources:
a. https://news.google.com b. https://www.wsj.com/ (soft-paywall) c. https://www.cmegroup.com/education/economic-research-reports.html d. https://www.cnbc.com/ e. https://finance.yahoo.com/
3. Choose two or three representative transactions that you made and discuss the following:
a. Which commodities did you decide to trade and what was your rationale for choosing those?
b. At the time of the initial trade, what was the price? What were your expectations about the price movement and how did your expectations affect your decision to go long or short? Write a few sentences describing the reasoning behind your expectations.
c. What was your justification for closing out your positions (assignment end date, contract expiration,
felt prices were going to move against you, etc.)?
d. What was the outcome of each transaction in terms of net profit/loss?
e. Include any recent events that affected the price of the futures contracts you traded and how those events affected the outcome of your transactions. Provide evidence by citing news articles.
4. Overall, how was your experience trading in the simulation?
a. What was your final portfolio value? b. What did you learn through your trading experience beyond what was covered in class?
5. For those who took out a loan to complete the trading assignment, add one extra page (about 350 words)
describing (a) the market movement that caused you to lose so much money, (b) how did you attempt to recoup your losses, and (c) whether you were successful in paying off the loan’s principal plus interest.