One of the greatest comedy movies of the 1980’s was Dan Aykroyd and Eddie Murphy in John Landis’ classic TRADING PLACES.
For those of you too young to remember (or too old to recall, take your pick), the film was a twist on either My Fair Lady or The Prince and The Pauper (also, take your pick), with a little bit of The Sting thrown in for good measure. But where The Sting dealt with scamming money through horse racing, Trading Places did it by investing in orange juice futures
So the question that a lot of folks have had is HOW MUCH MONEY CAN YOU MAKE IN ORANGE JUICE FUTURES?
That’s where Web Watch needs to rely on others to do their own CAREFUL ANALYSIS OF THE FILM to give us the answer we’re looking for.
The fast answer: Dan Aykroyd and Eddie Murphy’s characters made about US$252 million on that trading floor.
If the details interest you, you’ll want to read the great summary of how futures trading is done and how the money is actually made when you buy low and sell high. In essence, Winthrope and Valentine knew that the ultimate OJ pricing was going to be super-low when the real crop report came out, so they were able to sell a ton of futures that they didn’t have in their possession yet at those artificially inflated prices… then buy those contracts back from everyone at the correct… and depressed… pricing.
Profit!