Trading Places (1983)

Trader's Film Library #2 · Markets and trading in fiction. The best comedy about futures: funny and instructive.

Original title: Trading Places · Type: film · Created by: John Landis · Usefulness for traders: ★★★★☆

What it's about

The two wealthy Duke brothers bet a dollar that they can swap the lives of the privileged Louis Winthorpe (Dan Aykroyd) and street hustler Billy Ray Valentine (Eddie Murphy). The comedy ends with a big showdown on the trading floor.

What it has to do with markets

The finale takes place in the frozen orange juice futures pit. The brothers want to profit from a stolen crop report before it's published. The heroes swap the report and use short selling. The film shows the open-outcry pit, margin and the margin call. In 2010 the US Dodd-Frank Act included a provision banning trading on stolen government information, informally known as the “Eddie Murphy rule”.

Lessons for traders

• a data release changes the price in seconds (order flow atlas #16)
• leverage and margin: not having the funds to meet a margin call ends the position
• going short is a normal tool in the futures market

What to watch out for

The mechanics of the finale are simplified, but surprisingly close to real pit trading of the time.

Discussion

The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →

Navigation

← #01 Margin Call · Film Library index · #03 Wall Street →

The description outlines the plot without revealing the ending where possible (true stories have a known outcome). Educational content, not investment advice.