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Lesson 20: Is it humanly possible...

Is it humanly possible for a hypothetical investor like Mrs. B to make money speculating in commodity futures in the year 2001?

Mrs. B does not exist. She is 100% hypothetical. She has no stock market account and no commodity account and no options account. She is created solely for the purpose of illustration much as any character in any novel is created in order to let a story unfold. We first encountered our hypothetical Mrs. "B" in lesson eighteen and lesson nineteen where she was portrayed as a conservative lady, age about 45, who had invested in the stock market, futures and options contracts for years. In lesson nineteen, we considered her hypothetical purchases of corporation 101 shares in the years between 1990 and 2000. We are going to take a look at her hypothetical commodity trades in the year 2001. There are some ground rules that you should accept before we proceed and you will be given a test shortly to determine whether you understand these ground rules and accept them.

Rule Number 1. Mrs. B does not exist.

Rule Number 2. Mrs. B does not have a commodity account.

Rule Number 3. Mrs. B does not have an options account.

Rule Number 4. Mrs. B does not have an equity account.

Rule Number 5. Mrs. B is going to try to trade commodity futures in the year 2001.

Rule Number 6. In reality, of course, this will not be happening, but we will pretend that it is happening.

Rule Number 7. If Mrs. B seems to suffer any losses, she will not in reality suffer any losses because she has no account in which she has invested any money.

Rule Number 8. If Mrs. B seems to gain any profits, she will not in reality gain any profits because she has no account in which she has invested any money.

Rule Number 9. In these examples, even though from time to time it will appear that Mrs. B is real, you should always refer back to these rules to refresh your memory that Mrs. B does not exist. Her trading is hypothetical, her account is hypothetical, her money is hypothetical, and she is hypothetical.

Rule Number 10. If you understand all this, click here and proceed.

Bruce Gould

 

Always remember that stock, options, and futures trading may involve substantial risks and that past performance is no guarantee of future performance.