ARE 225 Spring 1998
Rules for the Futures Market Game
1. Each student  will speculate in the futures markets during 5 weeks: Wednesday, January 27 – Wednesday, March 3 Each student starts up with $50,000 to invest just to cover initial margins (forget maintenance margins, to keep it simple).

2. Each student chooses to buy and sell as many contracts as they wish given they cover the initial margins and that they stick to no more than 2 commodities at the time. The choices are:

Commodity          &n bsp;            &nbs p;         Size Month  Maturity         Initial margin ($/Contract)

Wheat (CBT)          &nb sp;              ;      5,000 bu       May 99      ;        1,000
 Coffee (CSCE)                       &n bsp;    37,500 lb.     May 99      &nb sp;      1,000
Pork Bellies  (CME)        & nbsp;        40,000 lb.     May 99      &nb sp;      1,000
Crude, light sweet (NYM)        1,000 bbl.     April 99      & nbsp;     1,000

 
3. Trading will occur during class days only. Each submit will submit his/her buy/sell orders at the end of each class and also record them for the final report. Each transaction must be accompanied by a short explanation justifying the move.

4. The actual price for each transaction is the settle  price of the previous day. Ignore brokers fees. The futures prices reporte d on the board outside the classroom are the ones to use for each transaction

5. The End:

 By default, all outstanding contracts will be closed on Wednesday, March 3. A group's final report staying all transaction s and profits (losses) per commodity and in total must be submitted on Friday , March 5. Although the student's grade will be based on the report, the student that makes the most money gets 100 points automatically on the futures game (which is 15% of the total grade for the class).