EBF 301
Global Finance for the Earth, Energy, and Materials Industries

Lesson 4 Activity

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"Trading Places" Video Clip Activity

The video is located in Lesson 4 under Modules in Canvas.

This movie was released in 1980. Although it is old, it still does a great job of illustrating what goes on in the "pits" of commodity exchanges. In this movie, the Duke brothers are rich commodity brokers. Dan Akroyd works for them and Eddie Murphy is a street bum. The brothers have a bet about one's genetics or their environment shaping their future. To test their theories, they ruin Akroyd's life and put Murphy in his place. When Eddie (William) discovers the bet he tells Akroyd and they plan to ruin the Dukes. They manage to find out that the Dukes are getting the Department of Agriculture's report on the orange crop before it is released to the public. Akroyd and Murphy steal the report from the Duke's man and replace it with a false one. The two then go to the NYMEX and out-trade the Dukes. The Dukes think their report, when released, will show crop damage and that will make FCOJ futures rise.

Several concepts of futures trading can be learned from this one clip....."going long", "going short", fundamental information (the crop report), "Locals" (the traders who jump into the action started by the Dukes), margin calls. You can also see the prices posted as the trades occur...."Open", "Last", etc.

Answer the following questions about the movie clip.

  1. What position did the "Dukes" take and why?
  2. How did they go about this?
  3. What position did Dan Akroyd and Eddie  Murphy take and why?
  4. How did they go about this?
  5. What was the financial downfall of the Dukes?
  6. What fundamental information was important to the Traders?

Grading Criteria

This activity is due at 11:59 pm on Sunday and is worth up to 20 points on the EBF 301 grading scale. Each question is worth 2 points.

Fundamental Factors

The Fundamental Factors activity is due as usual this week, at 11:59 pm on Sunday, and is worth 30 points on the EBF 301 grading scale. Please refer to the Fundamental Factors Instructions for additional information and grading rubric.

Submitting Your Work

Video Activity: Submit your answers as a word document to the "Trading Places Video Activity" in Canvas.

Fundamental Factors: Submit your work as a single word document o the Lesson 4 Fundamental Factors Activity in Canvas.