Trading Places Question...

Discussion in 'Archived Threads 2001-2004' started by DeathStar1, Jul 28, 2002.

  1. DeathStar1

    DeathStar1 Producer

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    Am I the only one who dosn't know jack about the stock market, and appreciates the explination before the films ending? This is a great movie, but even with the explination, the ending is a bit confusing for someone out of the know.
    all I know is, the Stock Market looks like nothing but legalized gambling [​IMG].
     
  2. Travis Olson

    Travis Olson Supporting Actor

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    I've always wondered about the ending myself. It seems as though Winthorpe and Valentine buy low and sell high and make a killing while the Dukes do the opposite and go broke. That's all I've been able figure. I'm by no means a stock market guru so I'm probably totally off.
     
  3. Matt Stone

    Matt Stone Lead Actor

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    Well, first off...it isn't the stock market...it's the commodities market, as explained earlier in the film.

    Regarding the ending, it's in reference to the false orange crop report that Valentine and Winthorpe give the Dukes. As a result they keep buying at a high price, assuming it will go higher...but when the actual crop report is released, the stock plummets, and they lose all of their money.
     
  4. David Echo

    David Echo Stunt Coordinator

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    "It was the Dukes! It . . . was . . . the . . . Dukes!"

    'Nuff Said.

    Dave
     
  5. Matt Stone

    Matt Stone Lead Actor

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    I can't wait until September 24 [​IMG]
     
  6. Alex Spindler

    Alex Spindler Producer

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    Best I can figure, they get a cash stock from Coleman and Ophelia's savings to buy some seed stock before trading begins.

    As the market opens, the Dukes buy stock under the belief that the crop report will be favorable. Many others catch on and cause a run on Orange Juice. At a critical point, just before the crop report, the good guys sell their seed stock.

    At this point, the good guys have a large amount of capital from the inflated stock sales and the Dukes have a lot invested in the inflated stock.

    The crop report comes out and is unfavorable. Suddenly, the stock is grossly overvalued and plummets in value. Nobody will buy the stock, so the Dukes see their value drop like a stone. At the basement in value, probably lower than the orange commodity is worth, the good guys buy. They burn through their seed stock and the profits and end with a ton of orange juice that will likely recover much more value to get back to its equilibrium. The Dukes get their hat handed to them probably because they can't cover any margin loans they have outstanding.

    Insider trading at it's finest.
     
  7. Seth Paxton

    Seth Paxton Lead Actor

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    What I can never understand is how they are keeping track of all the trades with those pieces of paper, especially when so many of them end up on the floor afterward.

    A guy in the middle yelling "Sell, Sell", people shouting at him, and somehow there's an official deal done in there?

    Why not just tear up your slips and pretend you never bought any (or at least less)?

    Do the slips represent a certain amount of stock/commodity sold (like they feverishly write down amount/price and then hand them to each other)?
     
  8. Tim Glover

    Tim Glover Lead Actor

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    not sure the real words here but:

    "bullica bullica bullica ha, bullica bullica bullica ha ha ha ha ha"
    _Eddie & Dan on the train...
     
  9. Henry C

    Henry C Stunt Coordinator

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    My favorite part about that scene is that trading for the day only lasts for like 3 mintues!!! [​IMG]
    I also cannot wait for 9/24, this is one of the funnest movies ever.
    Henry
     
  10. oscar_merkx

    oscar_merkx Lead Actor

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    count me in for september 24 as it is a superior comedy indeed with eddie Murphy, Dan Ackroyd, Jamie Lee Curtis and Denholm Elliott and the Duke Brothers at their best
    bring it on
    [​IMG]
     
  11. Berk

    Berk Stunt Coordinator

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    "Do you come from a broken home?"

    "Yeah, we was broke. So what?"
     
  12. Matt Stone

    Matt Stone Lead Actor

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    "Beef Jerky Time!"
     
  13. Henry C

    Henry C Stunt Coordinator

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    Whiskey.....all you want!
     
  14. Al B. C

    Al B. C Supporting Actor

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    I love when Dan Ackroyd is sitting on a bus, dressed like Santa, eating the smoked salmon through his beard.
    That's funny. [​IMG]
     
  15. Matt Stone

    Matt Stone Lead Actor

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    That is funny...I love that part.
     
  16. Tim Glover

    Tim Glover Lead Actor

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    "Those men wanted to have SEX with me!"
     
  17. John Kilduff

    John Kilduff Screenwriter

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    Even Bigger Black Guy: "Man, when you came in here, you was cryin' like a pussy!"

    Big Black Guy: "YEAH!"

    I'm buying this one!

    Sincerely,

    John "I'm hearing conflicting reports, though...trailer-only or totally bare-bones?" Kilduff
     
  18. Tim Glover

    Tim Glover Lead Actor

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    Great stuff John!

    "Didn't I tell you that the phone was out in my limo and I couldn't call my bitches?!"

    "Quarter blood technique...I hit you and a quarter of blood pops out!"
     
  19. David Tallen

    David Tallen Stunt Coordinator

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    As Matt Stone said, the Dukes held a seat on a commodities exchange - not a stock exchange. They were all buying and selling commodities futures contracts, not shares of stock. A share of stock represents actual (partial) ownership of the company; a commodities futures contract represents the right, at some known time in the future, to either buy or sell a certain quanity of a commodity at a specified price. The commodity in the movie is frozen orange juice concentrate. Other commodities are, gold, silver, oil and soybeans. Just about anything that can be purchased in bulk, and for which one truckload is pretty much the same as another, can be traded as a commodity.

    In the movie, it is advantageous to know in advance whether the weather in orange producing areas will be favorable or unfavorable for orange farmers. Good weather means lots of oranges (more orange juice) and lower prices. Bad weather means fewer oranges (less orange juice) at higher prices.

    If you are a commodities trader, it doesn't matter whether there will be lots of cheap oranges of a few expensive oranges. It does matter, however, that you know what the weather will be like. If you believe that the weather will be bad for oranges, then you want to buy futures contracts now, while the price is relatively low, because the bad weather (coming in the future) will drive the price up even more. You will then sell your contracts in the future (or the actual orange juice concentrate, if you prefer) at a healthy profit.

    If you (the commodities trader) believe that the weather for oranges will be good (in the future) then you want to sell all the futures contracts you can, now, before the price falls (in the future).

    The Dukes had the phony weather report that said the weather would be bad, so they were buying all the contracts that they could, confident that the price would go up even more in the future.

    Who were the Dukes buying all these contracts from? Initially many other brokers, but eventually mainly from Winthorpe and Valentine. Where did Winthorpe and Valentine get all these contracts to sell? That's the beauty. They didn't have to actually own any contracts to sell them. They were "selling short". That is, selling now with a promise to buy back in the future. In reality, you need a lot of collateral (money) to do that, but the movie doesn't waste time on very many practical issues.

    So, on the fateful day, the Dukes start out the morning by buying everything they can. The law of supply and demand says that when there is a lot of buying, the price goes up. The Dukes drove the price up with all there early buying.

    When the price was sufficiently high, Winthorpe and Valentine start selling (short) because they knew that the real weather report was favorable for growing oranges. They sell and sell and sell, eventually driving the price back down.

    By the time the day is over, the Dukes had bought a lot at an average price much higher than the price was at the end of the day. Winthorpe and Valentine had sold a lot at an average price much higher than the price was at the end of the day.

    According to the rules of the exchange, all accounts had to be settled in cash (or something worth cash) at the end of the day. The only thing the Dukes had left that was worth anything was all the contracts they bought, but those contracts were not worth as much as the had bought them for. Therefore, the Dukes were insolvent and the exchange liquidated all their assets. They bought high and were forced to sell low.

    Winthorpe and Valentine would also have to put up something of value, even though they were selling, not buying. However, in their case, the contracts that they sold were worth a lot less than they had sold them for, so those contracts (without additional cash) were sufficient collateral to cover their obligation. They could have (maybe they did; I can't remember) bought back all their contracts for much less than they had sold them for earlier in the day. They had sold high and were now in a position to buy back low.

    Of course, as with all fantasy, the advice, "Don't try this at home" is very good advice. In the real world, all four of these guys would be sharing a cell in a federal prison. Their shenanigans would have been transparent to the authorites who would have undoubtedly started an investigation before the day was over. In the world of the movies, however, it is always fun to see the rich bastards get what they have had coming to them for a long time.
     
  20. Jeremiah

    Jeremiah Screenwriter

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    Well, my life is now complete after I have been educated on the end to Trading Places. After all my viewings I never really understood what the heck just happened. I will definantly get this once it hits the shelves.

    I used to have the "Didn't I tell you that the phone in my Limosiene is busted and I can't get in contact with my B*****" quote on my answering machine about 6 years ago. My friends would call just to here Eddie Murphy say that.

    "Who's been putting their Kools out on my floor?!"

    A classic comedy.
     

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