Movie review on the financial aspect of trading places - Finance Essay Example

Trading Places is about 2 rich brothers who made a wager as to the nature of a rich educated man against a poor man - Movie review on the financial aspect of trading places introduction.  The question, which was the focus of the wager was whether a rich man will behave like a hood if placed in the wrong environment and whether a poor man will behave in a more “civilized” manner given the opportunity.

Although that was the main focus of the movie, a great deal of the story and the main force that could bring the wager to fruition involves the commodity market.

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It is possible that the hobo, Billy Ray Valentine played by Eddie Murphy has a knack in trading.  There are traders in the stock, foreign exchange and commodities market that come from different backgrounds but just have a talent in haggling, negotiating and ultimately trading.  However, it is not possible for a man who has to be able to manage a whole company as Duke & Duke Brokerage unless they have the proper education, background and experience.

What is of interest, however, is the manner in which Valentine and Louis Winthrop (Dan Ackroyd) made the Dukes poor – they short sold.  Short selling means to sell first then buy later resulting in a profit.  It may not make sense to the common man how one can sell something they do not have, however, this is commonly practiced in the market.  Making the Dukes think that there will be a shortage of orange due to the winter made them buy and people trusting the Dukes bought as well which made the price go up.  At which point Valentine & Winthrop sold driving the price of orange down and when the price was low enough bought giving them a profit of a $100 or more for each contract that they sold.  Honestly, both parties committed a crime in the form of insider trading.  Notwithstanding, a lot of time in the end of the movie was focused in commodities trading and it was important the action at that time was understood to truly appreciate the revenge of Valentine & Winthrop.  However, if the viewer was not very familiar with trading concepts, the significance of the scene will go over their heads.  Otherwise, this movie was a very well written movie with the dynamics of the commodities market being well represented.

 

Reference:

Trading Places. Dir. John Landis. With Dan Ackroyd, Eddie Murphy & Jamie Lee Curtis. Cinema Group Ventures, 1983.

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