[Cashmere]

If I wanted to argue semantics on that snippet of a sentence I could but why bother.

You set out to provide an explanation for "futures" and you started by immediately mis-defining the reason for the name.

Inherent in your definition was the concept that price is determined at a future point. If somebody was to read your post, your internal contradiction may have been confusing.

So I corrected it.

Whether or not the example following it was correct is irrelevant to my correction.

Don't be so touchy.

[AlexdeLarge]

A lot of todays market rally was the shorts being sent to the juicer on their financial stocks. Wow............what a spike at the beginning of trading. A bunch of the hedgies took it on the chin!

[Concerned]

Short and Long are opposite ends of the same trade.

It's called FUTURES because you buy or sell today at a FUTURE price.

It's called futures because the contract is for future delivery, not a future price.

Silly goose.

In finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price. The future date is called the delivery date or final settlement date. The pre-set price is called the futures price. The price of the underlying asset on the delivery date is called the settlement price.

The above from wiki. Looks like it's both price and date.

So really you corrected nothing. At best you added to and completed what would become a better definition at worst you muddied the waters and insulted someone.

Have a nice day.

[Art_Vandelai]

This is going to come back to haunt the nation in the worst way.

Think about hedge funds for a minute.

One of the most prevalent strategies used by hedgers are "pairs" strategies. They buy one stock that has strong fundamentals, and they short one stock in the same industry that has weak fundamentals, expecting that in combination, the pair will be profitable no matter which direction the market moves in.

Are all of the stocks with strong fundamentals now going to get sold off because of this?

It's almost like the US wants to punish good corporate management in order to reward the poor managers, This will be a huge disincentive for American businesses to exercise the prudence and discipline they need to survive.

[idiom]

... The thing in which you invest - tullip bulbs, ...

Dude, how old are you???

[cube]

The narrator is obviously biased and thinks short-selling is a problem.
However if you ignore the last 10 seconds I'd have to say this is a very good quick and easy explanation.

So what is short-selling?

[Niagara]

Selling someone something you don't own....

You know, if a person does that with a house or a car that's just called fraud. WTF?

No, it's not fraud. When you short sell you are borrowing the shares from your brokerage firm's account with the understanding that at some point you "cover" by purchasing the shares and repaying the brokerage.

When you buy a house or car, it's often the same. You borrow the money to make the purchase. That's not fraud.

[mattduke]

There is nothing morally wrong about short selling stocks.
Speculator is a propaganda term.
Naked short selling, on the other hand, is legal fraud, in the same manner that fractional reserve banking is legal fraud.

[TheDude]

... The thing in which you invest - tullip bulbs, ...

Dude, how old are you???

Tulip mania - Wikipedia, the free encyclopedia

Tulip mania or tulipomania (Dutch names include tulpenmanie, tulpomanie, tulpenwoede, tulpengekte, and bollengekte) was a period in the Dutch Golden Age during which contract prices for bulbs of the newly introduced tulip reached extraordinarily high levels and then suddenly collapsed. At the peak of tulip mania in February 1637 tulip contracts sold for more than 20 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble.[1] The term "tulip mania" is often used metaphorically to refer to any large economic bubble.[2]

[idiom]

I was just wondring if he might remember earlier investment opportunites, like when papyrus was first launched.

[Dreamtwister]

... The thing in which you invest - tullip bulbs, ...

Dude, how old are you???

That made ma laugh out loud, because I got the joke.

[charliebrownout]

Selling someone something you don't own....

You know, if a person does that with a house or a car that's just called fraud. WTF?

No, it's not fraud. When you short sell you are borrowing the shares from your brokerage firm's account with the understanding that at some point you "cover" by purchasing the shares and repaying the brokerage.

When you buy a house or car, it's often the same. You borrow the money to make the purchase. That's not fraud.

Okay, so you're borrowing, essentially, from yourself or another company that pretty much knows exactly what you are doing and why.

Again, I'm new, so, to me, it looks like a crazy shell game...so, I expect what is being done to be morally on the level of a "shell game".

[smallpoxgirl]

Again, I'm new, so, to me, it looks like a crazy shell game...so, I expect what is being done to be morally on the level of a "shell game".

It's not a shell game. The people who's shares are being sold agree to loan them out. Usually the way that works is that it's a margin account. In a margin account, your broker agrees to loan you money so that you can buy up to twice as much stock as the amount of money that you deposit in your account. In exchange, you agree to let your broker borrow your stock shares for other customers that want to sell short.

The basic idea of a market is that there are two groups of people vying to control the price and between them they establish a fair price. The only way to have that in a stock market is if you've got bulls trying to push the stock up by buying shares and short sellers trying to push the price down by short selling shares. Otherwise the market is going to run towards unchecked an unrealistic optimism until there is a crisis. Then there will be unchecked panic as people get terrified of the company going bankrupt and the stock value going to zero. It leads to unrealistic run ups followed by exagerated panics.

[Cashmere]

In finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price. The future date is called the delivery date or final settlement date. The pre-set price is called the futures price. The price of the underlying asset on the delivery date is called the settlement price.

The above from wiki. Looks like it's both price and date.

You must be in sales.

No reasonable interpretation of the passage you cited could yield the result that the price is a future price.

The price is the contract price, which doesn't change.

The instrument is called a "futures contract", or "futures" for short.

So of course the price that you pay now for the contract is the "futures contract price" or "futures price".

Next.

[Triffin]

He who sells what isn't hizzen ..
Has to cover or go to prison ..

Triff ..

[frankthetank]

The stock market is WAY too complicated for me. I'm guessing about 99% of Americans have no idea how their money is invested...

[cube]

I'm guessing about 99% of Americans have no idea how their money is invested...

+1