Once the crop report is announced, they wait a bit and then start buying at $0.46 and keep doing so until the end of trading, when the price is at $0.29. End Explanation of the movie Trading Places. The biggest mistakes you never noticed in Trading Places (1983). A major firm like Duke & Duke going bust would've required their positions in gold, silver, oil, cocoa, and other futures to get liquidated (or at least offloaded) and give a slight bump down to those commodities (depending on how quickly they were sold). A branch or kind of business: the women's clothing trade. They are buying and selling at the market rate, which changes as a consequence of their actions. I mean why did they start buying knowing the price is continuously going down? You got the highlights correct, but missed some key points: 1. Maybe we'll revisit it around Christmas, when they tend to play this movie nonstop. Set mainly in Philadelphia, where ‘legless’ Billy Ray begs in a wintry Rittenhouse Square, at 18th and Walnut Streets, to the southwest of the city centre. I still don't get "future's". They do this because they know their enemies, the Duke brothers, will trade on the phony report. : Don’t try this at home. I'm reading one of Jim Cramer's books and he is talking about that now. The price of a commodity will be stopped if it ever fluctuates more than 10 cents (either direction) during one trading day. I tried to reason it out: let's say merchant A has no money but signs a contract to buy 1000 lbs of rice on Jan. 1. In the movie, they have to settle for "$394 million" due to the margin calls. In March 1980 when the COMEX (main commodities exchange) put a new rule about buying silver on margin (i.e. out loud so hard while reading your second paragraph. Thank u! Trading on margin: For stocks this means you must have 50% of the value of the stock in cash and the brokerage will lend you the other 50%. Thankfully I put the right search terms into Google to find this post! This would've been in people's minds at the time of the movie. Also, the cash they hand on hand didn't really matter, as they were trading on margin. For ease of calculation, we can think of it as them trading on average at $1.22. Low price was .29 with most trades happening in between. As a word of caution, please don't trade commodities if you are reading this. Feeling good. Couple that over several tens of thousands of contracts and Billy Ray and Lewis could conceivably walk away with BILLIONS in gains. It is safe to say that the trading places ending explained is an art. A great movie with a fab cast, and my limited knowledge of the stock market stumping me as to how buying for a high price and selling for a low price would make money. Here Are 8 Smart Money Moves You Can Make Now, Bad Dogs: These Breeds Are the Worst for Your Home Insurance Policy. Movies. If you choose to interact with the content on our site, we will likely receive compensation. A contract to sell, say, 1000 pounds of FCOJ at $1.50 per pound in February merely indicates the seller's obligation to provide and the buyer's obligation to purchase the product at the specified price and time. Trading Places isn’t exactly a traditional Christmas film. Many companies featured on Money advertise with us. You've put to rest one of those lingering unanswered questions I've always wanted resolved...and I'm NOT joking!! This helped me understand the movie.. My professor told us to watch this movie and when that scene came out, I was like...what the hell is going on? It is safe to say that the trading places ending explained is an art. Now I don't feel so alone in my confusion. kindly contact me with my email as provided. TRADING PLACES tells the story of greedy, wealthy Wall Street brothers Mortimer (Don Ameche) and Randolph (Ralph Bellamy) Duke, who wager on whether environment or heredity defines a man. P.S. When it's equities being traded, selling what you don't have in anticipation of buying the equity at a lower price and then delivering it a few days later to receive the higher price is called selling short, just in case anyone wanted to know that tidbit. Aykroyd and Murphy steal a report that will cause the price of orange juice to fall, and replace it with a report that says OJ prices will rise. After seeing the movie "Trading Places" (1983), starring Eddie Murphy and Dan Aykroyd, for the thousandth time during the holiday season, I decided to write a quick post explaining what happened at the end of this movie that gets so many people puzzled … It does not matter how or where the seller gets the product, as long as, one way or another, he is able to provid… Trading Places Prime offers various benefits and discounts for exchanges and rentals. Trading Places is a goofy movie that makes a clear, crucial plea: by 1983, it was well past time to let go of racial bias. You see, here's my deep dark secret: I don't really understand what happened during the climatic scene at the commodities exchange! ... Lots of stuff in Trading Places, including insider trading, is illegal. Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page. The value skyrockets. I GET IT!!! Trading Places is the farthest-reaching FREE vacation rental & timeshare exchange network. Thanks a LOT! 3. So let's look at one trade you can hear which is "200- $1.45 April!". And, to be honest, I never really understood what happened at the end of that movie. Been watching for years and never understood how in the hell they did it...great movie one of all time favorites, Thanks a lot! I just said "ohhhhhhhhh!" Wikipedia is a great source (generally, I have found) for explaining finance terms. In this case, Winthorpe and Valentine first "sell" FCOJ futures at roughly $1.45 per unit, a price inflated by the Dukes themselves (the Duke Brothers' buying leads other traders to believe that the Dukes are trying to corner the market, causing a buying frenzy). The people working in or associated with a business or industry: writers, editors, and other members of the publishing trade. Open in Google Maps; 3. Essentially he is making a bet that the price will fall. Thus, for every future unit they had previously sold at $1.45, they purchase a matching amount for only $0.22, resulting in a profit of over $1.20 per unit (over 545%). I'll take a rain check on the Digg. Lucky for me, Wikipedia has the answer: "With the authentic orange crop report indicating a good harvest of fresh oranges, frozen concentrated orange juice (FCOJ) would be less important to food producers and so would be likely to drop in price once traders heard the news. Basically, he buys a lot of orange juice for very cheap, and sell it for a lot of money. In the film, Philadelphia's City Hall is featured in a climactic court scene. I have seen this movie at least 7 times and NEVER understood how they "won" at the end. Thank you for the explanation!! With FCOJ futures, every contract is for 15,000 pound of orange solids. Learn more about how we make money. Opinions expressed on this site are the author's alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. In English that means that the person A is promising to buy and seller B is promising to sell 3,000,000 pounds of orange solids at $1.45 per pound due in April (a $4,350,000 transaction). ‘He has also recently turned commentator on India's business and economic scene and indeed social and political arenas.’ ‘In the tough, macho arena of rock climbing, one woman has beaten the boys at their own game.’ ‘He did not seek to enter the political arena which is where you would seek to place him, with all its attendant risks.’ Opinions are our own, but compensation and in-depth research determine where and how companies may appear. Click here to learn more about Trading Places Prime. Trading Places What happens when you combine the comic genius of Eddie Murphy with Dan Akroyd and director John Landis? Disclaimer: The links and mentions on this site may be affiliate links. The police (and hopefully the reader) believe the gang to be responsible for the murder. I can't tell you how many nights I have laid awake (only after every viewing actually) trying to figure out how they busted the Dukes. Trading Places does offer an upgrade fee-based membership, Trading Places Prime. I suppose I am boring but I did think that the climax scene would be about finance. Unlike conventional stock, futures contracts can be sold even when the seller does not yet own any of the commodity. It is strongly implied that they purchased additional futures on margin and made dozens (or hundreds) of millions more, since a lesser amount would not bankrupt the Dukes. Eddie Murphy's Trading Places is one of my favorite movies of all time. 7 calle 1, Suite 204 Trading Places is certainly a goofy and over the top comedy, but one that remains funny more than 30 years later. Then everyone buys. This happened in 1979 and 1980 -- Tiffany's even bought a full-page ad in the New York Times complaining about this. So if JuiceMan thinks, at harvest, oranges will be more expensive, say $75/1000, he can collect his 1000 oranges, pay $50 and then sell those oranges to MinuteMaid for $75 and pocket the $25. To that end, you should know that many or all of the companies featured here are partners who advertise with us. wouldnt they make more money if they bought the commodity at the following trading day where the price is at its lowest? Add more and vote on your favourites! But they do not affect the actual opinions and recommendations of the authors. You all know enough now to ruin your financial lives if you believe for one second that you can do this. The contracts they are buying and selling are for 15,000 units each. The math is a little off in the examples but the ideas are right. The climactic scene is between the protagonist and a gang member who is involved in that activity. So what really ends of happening in the movie is this the Dukes' broker buys contracts like crazy believing that the crop is bad (less oranges coupled with same demand means higher prices). The math you used was correct, but the numbers you supplied were wrong. Thanks! The stock market trading curbs (at least in the US) didn't get enacted until after the 1987 crash. This is commodities trading. (Also, the Hunt Brothers going bust almost led to their main trader going bust, and folks were worried the reverberations of people owing other people would've led to some bigger scalps getting taken.). That was the fricken best explination ever. Thank You !!! Dead end. Either way, they make a lot of money. Trading Places is, by some measure, one of the funniest films ever made, and certainly one of my absolute favourite movies of all time – but it is also, undeniably very, very wrong. but it was a good read anyway. Last week, we celebrated the 30th anniversary of Trading Places, the greatest movie about finance ever made, with an oral history of the film. Then, when the price falls as a result of the release of the real crop report indicating a good harvest, Winthorpe and Valentine buy futures at roughly $0.22 per unit. I should probably edit the title, but now I kinda think it is funny so it stays! Lots of stuff in Trading Places, including insider trading, is illegal. Moving to the big scene, the Duke brothers, through their trader, starts buying OJ futures. Lots 81-82 Street C Contents1 The key skill of trading places ending explained is the ability to hear others.2 The gift of persuasion.3 Strategy and trading places ending explained. A contract to sell, say, 1000 pounds of FCOJ at $1.50 per pound in February merely indicates the seller's obligation to provide and the buyer's obligation to purchase the product at the specified price and time. Explanation of climactic scene See also: Short (finance) With the authentic orange crop report indicating a good harvest of fresh oranges, frozen concentrated orange juice (FCOJ) would be less important to food producers and so would be likely to drop in price once traders heard the news. Once the price gets to a high point, and the whole market thinks the price will only go up, Aykroyd calls out a promise to sell OJ at that high price in the future. FINALLY!!! Offers may be subject to change without notice. Thanks Paul! haha i thought you were going to talk about something kinky too and was kinda disappointed. (Beeks since he was carrying non-public government information, would've been in a bit of trouble himself.). Menu. And, to be honest, I never really understood what happened at the end of that movie. Witness. But I still don't get it. When they are selling, they start selling at $1.42 and stop selling when the crop report is announced, where the price is at $1.02. haha. Ultimately the choice is yours. So we can think of their average buying price as $0.375. So a better estimate of their profit based on your figures is: (122 cents/pound - 37.5 cents/pound) * 15000 pounds/contract * 20000 contracts = $253,500,000. 2. :-D. It has bugged me for years. Your estimation was that $2.7 million changed hands but here's the real math: High price was $1.45. Someone needs to. Moving to the big scene, the Duke brothers, through their trader, starts buying OJ futures. Release Calendar DVD & Blu-ray Releases Top Rated Movies Most Popular Movies Browse Movies by Genre Top Box Office Showtimes & Tickets Showtimes & Tickets In Theaters Coming … If you have $500,000 you could buy $1,000,000 worth of stocks. There are so many unforgettable moments. At the same time, the Duke brothers purchase enormous quantities of FCOJ futures, even at relatively high prices, because they incorrectly expect that the crop report (falsely suggesting a greater need for stockpiled orange juice) will create a demand at even higher prices, securing them a profit. Thank you for using my photo ( oranges @ yinnxp's Flickr ), kindly contact me at the email provided :). They start selling contracts at $1.42 (a $4,260,000 if it was a 200-1.42 April). "Trading Places" resembles "Tootsie" and, for that matter, some of the classic Frank Capra and Preston Sturges comedies: It wants to be funny, but it also wants to tell us something about human nature and there are whole stretches when we forget it's a comedy and get involved in the story. Commodity futures are (now) subject to the same rules, so if the price of gold dipped from say $1,000 to $930, there'd be a halt in trading for 15 minutes. 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