Trading Places Final Exchange Scene & Explanation

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The Duke brothers tried to steal the crop report. But Billy-Ray and Lewis, after having been quite ill used by the Dukes, get the real report and give the Dukes a fake. The Dukes send their trader to the commodities floor with instructions to buy like crazy. Their fake report shows a tough winter, and so they're betting the price will go way up after the "official" release of the report. The trader starts buying and others see the Dukes trying to corner the market, so they start buying. This drives the price up. At just the right time, Billy-Ray and Lewis "sell" futures contracts for orange juice. They sell like crazy. They're selling contracts for orange juice they don't even own and can't deliver. (Basically short selling - in commodities all you have to do is be able to deliver at the date in the contract). Their selling drives the price down a bit. It also pads their trading account with a ton of cash. The secretary of agriculture announces that the winter did not affect the crop, so the pit full of traders freaks out! There's not going to be price pressure, so they're all holding OJ contracts that are seriously overpriced. A mad selling frenzy ensues, driving the price way down. Again at a point timed for maximum effect, Lewis and Billy-Ray Valentine announce that they'll "buy em" -- they buy back the OJ contracts at a much lower price than they sold them for earlier, netting them a huge profit. They also refuse to sell to the Duke's trader, freezing him out. The Duke's get a margin call and go bust and our heroes make a lot of scratch. Of course, in real life, trading curbs and circuit breakers would prevent either side of this play, but it is educational and funny to watch.

Channel: Education
Uploaded: November 8, 2007 at 7:41 pm
Author: LeguleiusGonzo

Length: 0:07:11
Rating: 4.86
Views: 55,347

Tags: trading places exchange floor FCOJ education commodities insider information fair use educational excerpt

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Video Comments:
Jim21680 (Sunday 30th of November 2008 07:59:34 PM)
Seriously...one of the best movies of all time! Love it - it's definitely my favorite comedy.
McBrainsen (Friday 28th of November 2008 09:54:31 PM)
Thanks for explanation;) So how much money did Winthorpe and Valentine make at that day? How do you calculate that?
Mindaugasx (Sunday 16th of November 2008 03:16:23 AM)
Nymex?
jerrygofixit (Monday 3rd of November 2008 09:01:09 PM)
Thank you for letting me count on YouTube to find EXACTLY what I want, right down to the scene!
HotBroodish (Friday 21st of November 2008 12:01:35 PM)
haha same here.
Reed488 (Sunday 26th of October 2008 10:26:41 PM)
What a brilliant scene.
sag1101 (Wednesday 22nd of October 2008 05:19:06 PM)
That is an interesting point. Now how can you even define insider trading if you are dealing with FUTURES? stocks should reflect the state of the company NOW, but futures deal with condition of the martket in the.. well.. FUTURE. In this case FCOJ.
lobstertexas (Thursday 20th of November 2008 08:49:04 AM)
After 9/11 investors who had significant short-sells on AMR and UAUA were investigated on the basis of being on the inside of a "future event" affecting their stock prices, but you are right, with commodities it's all speculation.
DJMuppet339 (Sunday 19th of October 2008 01:24:30 AM)
go2 my profile and msg my msn name if u want to talk R
YewT0ob (Thursday 16th of October 2008 09:36:14 AM)
I just got done taking a shower! i just watched ur video while im naked! lol xD p