APEC 409/609
Commodity Futures Markets
Spring 2007
Instructor: Dr. Charles Curtis, Jr.
Department of Applied Economics & Statistics
264 Barre Hall
Phone: 656-5781
Email: ccurtis@clemson.edu
Office Hours: Monday, Wednesday and Friday -- 8:00 - 11:00 a.m. & by appointment
Class: Monday, Wednesday and Friday -- 9:05 - 9:55 a.m. E144 P&AS (Poole Hall) (If instructor has not arrived by 9:20 a.m. students may leave)
Required Materials:
Leuthold, R.M., J.C. Junkus, and J.E. Cordier. The Theory and Practice of Futures Markets. Lexington Books, 1989.
VanSickle, J., Financial and Agricultural Commodity Trading Simulation (FACTSim), Food & Resource Economics, University of Florida. http://www.factsim.org/
Course Description. Introduction to the economic theory, organization, and operating principles of agricultural commodity futures markets in the United States and globally. Emphasis is placed on speculating, hedging, and investing in commodity futures contracts from the standpoint of the entrepreneur. We will focus our attention on the use of futures markets in trading agricultural, financial, metals, energy, currency and indices futures. We will use a commodity futures trading game and a team hedging exercise in which you will be required to participate.
Course objective: This course is intended to provide students with an understanding of the mechanics and value of futures markets for speculators and hedgers. In addition, the concepts of how these markets can be and are employed as tools in the price risk management activities of agribusiness and other firms will be taught.
Academic Honesty: "As members of the Clemson University community, we have inherited Thomas Green Clemson's vision of this institution as a 'high seminary of learning.' Fundamental to this vision is a mutual commitment to truthfulness, honor and responsibility, without which we cannot earn the trust and respect of others. Furthermore, we recognize that academic dishonesty detracts from the value of a Clemson degree. Therefore, we shall not tolerate lying, cheating, or stealing in any form."
Any breach of the principles outlined in the Academic Integrity Statement is considered an act of academic dishonesty. Academic dishonesty is further defined as:
1. Giving, receiving, or using unauthorized aid on any academic work;
2. Plagiarism, which includes the copying of language, structure, or ideas of another and attributing the work to one's own efforts;
3. Attempts to copy, edit, or delete computer files that belong to another person or use of Computer Center account numbers that belong to another person without the permission of the file owner, account owner, or file number owner;
All academic work submitted for grading contains an implicit pledge by the student that no unauthorized aid has been received. When, in my opinion, there is evidence that a student has committed an act of academic dishonesty, I will make a formal written charge of academic dishonesty, including a description of the misconduct, to the Associate Dean of Undergraduate Academic Services. At the same time, the faculty member may, but is not required to, inform each involved student privately of the nature of the alleged charge. The instructors intent will be to assign the offender a grade of F for the course.
Grading:
Two Exams 200 points
Futures TradeSim Game 50 points
Quizzes & Homework 50 points
Capstone Risk Project 100 points
450 points total
Grades will be assigned as follows: 90-100 = A, 80-90=B, 70-80=C, 60-70=D, and <60=F. I will describe futures trading game and team hedging exercise as we approach that part of the class schedule. You will be required to do some simulated trading.
Class Attendance
College work proceeds at such a pace that regular attendance is necessary for each student to obtain maximum benefits from instruction. Regular and punctual attendance at all class sessions is a student obligation, and each student is responsible for all the work, including tests and written work, in all class and laboratory sessions. No right or privilege exists that permits a student to be absent from any given number of class sessions except as stated in the syllabus for each course. At the same time, it is obvious that students have valid reasons for missing classes; the instructors are expected to be reasonable in the demands they place on students.
Class Schedule and Assignments (Tentative Lecture Topic Schedule)
Class Roll, Discuss Course Syllabus, etc.
Introduction to Futures Markets
Speculation in Commodity Futures
Margin Accounts
Order Types
Speculation Mechanics
Introduction to Speculation exercise
Basis Relationships
Cash Contracts on Basic Commodities
Futures Hedging Mechanics
Exam Review
EXAM 1
Fundamental Analysis
Psychology of Markets
Technical Analysis Introduction
Bar Charts, Volume & Open Interest
Moving Averages, Stochastics, Relative Strength
Options on Futures Basics
Option Pricing
Hedging with Options
Exam Review
EXAM II
Advanced Options Uses
Agricultural Price Supports and Hedging
Introduction to Team Hedging Exercise
Interest Rate and Financial Futures
Currency Markets and Exchange Rate Futures
Index Futures Contracts
Price Risk Management Strategies
Hedging Project Reports
An Overall Perspective on Futures and Options
FINAL CAPSTONE REPORT
This syllabus is preliminary and subject to change. The official version is the one distributed in class.
Spring 2007 Course List 
AE & S Home
2007 Charles E. Curtis, Jr., Department of Applied Economics & Statistics, Clemson University, Clemson, SC 29634
updated 2/28/07