Why did they need the money in Trading Places?
So I know what was happening at the end of Trading Places (promising to sell OJ at 142 and then buying at 29 when the price drops)
However, if you can just buy stuff, or make promises to buy, without having the cash to hand, why was it important they get the cash from the others before they start trading?
Best Answer
The clearinghouse requires that all traders post margin. Otherwise, everybody would be able to trade in infinite size and the losers would not be able to make good on their bets.
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How did they get rich on trading places?
In other words, Winthorpe and Valentine have contracts allowing them to buy millions of pounds of orange juice in April for 29 cents a pound, and to sell it for $1.42 a pound. They sold high and bought low. They're rich. The Dukes made the opposite bet and went broke.How much money did they make at the end of trading places?
Profits: (122 cents/pound - 38 cents/pound) * 15000 pounds/contract * 20000 contracts = $252,000,000.00. Cha-ching! Since the Dukes' agent flamed out, he's holding a bunch of contracts at the end of trading.How did Louis and Billy Ray make money in trading places?
How much did Billy Ray and Louis make in their scheme? The actual amount isn't given but the Dukes had to pay $394 million ($1.011 BILLION in 2019 adjusted for inflation) In the movie, the Dukes "shorted" oranges in a "margin" trade, using leverage.What was the bet in trading places?
Billy Ray Valentine is a hustling beggar. Winthorpe's employers, the elderly Duke brothers, make a bet that by switching the lifestyle of the two, Billy Ray will make good and their man will take to a life of crime.Orange Juice Trade :D
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