noob question

Discussion in 'Commodity Futures' started by dadbofor, Jul 19, 2017.

  1. dadbofor


    How come when i go long on sep17 feeder cattle futures for example my position becomes worth less as the price increases passed what i bought it for ? and worth more when it goes bellow what i bought it for ? isnt that counter intuitive ? i thought it should increase in value as price goes up?

    also when i short light sweet crude /qm for example... my position value increases as the price goes up ?

    is there something wrong here ? im paper trading on thinkorswim.
  2. dadbofor


    another example.. I bought /ZW wheat futures at at $514. current price is at $504.25 yet my contracts are worth about $550 P/L open. how can the value of my contracts increase if the price is bellow what i bought it for ?
  3. dadbofor


    but this doesnt always happen i have long position that have increased in value and the price is above what i bought it for... can anyone tell me the meaning of this ?

  4. I don't use TOS, but my guess is that what's happening is that TOS is showing your P&L since the the previous close, and not the P&L since you took the position.

    For example, let's say you bought ZW at $514. The same day, it closed at $500. The next day, it opened at $504.25. Then your P&L for that day would show as positive, because the contract gained since the last close.
  5. dadbofor


    so the P/l figure i gave was for P/l open not P/l day which is the P/L since taking on the position
    here is an example of /QM i shorted at price 46.30 current price is 47.325. Shouldn't the value of this order be negative ? each contract has increased in value by $512.5 but its above where i shorted it. futurespic.jpg
  6. dadbofor


    heres another example i went long at $514. price is currently at $504.25. why are my contracts net positive if its below where i bought it at ?
  7. dadbofor


    notice on the /ZW contracts that the further the buy price is from the current price = more value for the contract. How does that make sense if I'm long ? the $516 contract is worth $612.5 and the $514 price contract is worth $512 but the current price is $504.25
  8. Ok, I see the issue. The P&L is correct, but you are reading it wrong. When the P&L figure is shown in parentheses, it means a negative value, i.e. a loss. For example,

    $512 means a gain of $512
    ($512) means a loss of $512

    It's an accounting convention to display negative values as positive surrounded by parentheses.
    Last edited: Jul 19, 2017
  9. dadbofor


    ahh ok I see. Thanks for clearing that up. I was losing my mind hahaha
  10. algofy


    Please stop trading live until you learn more about how the markets work.
    #10     Jul 19, 2017