COMMODITIES MARKETS AND FUTURES TRADING
AGEC 447 – Fall 2014
School of Agriculture - Western Illinois University
INSTRUCTOR Professor William C Bailey
Office Phone: 309/298-1522
Office Fax: 309/298-2280
Office: 322 Knoblauch
Office Hours: 1 PM – 3 PM Monday,
Noon – 1 PM Tuesday, 1-2 PM
Wednesday
E-mail: WC-Bailey@WIU.EDU
CLASS TIMES AND LOCATIONS
AGRI 447 will meet on MWF in Knoblauch 308 from 11:00 – 11:50 a.m.
COURSE DESCRIPTION AND PREREQUISITES
Futures trading institutions, technical analysis, multiple hedging and speculation.
COURSE OBJECTIVES
1. To develop a basic understanding of the principles of commodity futures and their use for risk
management and price discovery.
2. To understand the relationship between commodity futures markets throughout the world.
3. To develop a basic understanding of graphical and quantitative tools used in addressing economic
problems.
EXPECTATIONS OF STUDENTS
Participation: Students are expected to regularly attend class and to actively participate in discussions.
Academic Integrity: The rules and regulations outlined in the University's policy on academic integrity
are applied to this course.
Student Rights and Responsibilities: Detailed information regarding student rights and responsibilities
can be found at http://www.wiu.edu/provost/student/. It is your responsibility to be familiar with the
posted information.
Special Accommodations: If you need special accommodations, please feel free to stop by and discuss
your needs or contact Disability Support Services at 298-2512.
Attention Education Majors: The changes within the state certification requirements, which go into
effect immediately for all of those students who graduate in the spring 2012 and after, you are required
to receive a grade of a "C" or better in this course in order to meet these new requirements. With the
new university +/- grading system, receiving a "C-" or below will require you to retake this course or
find a substitute course to meet School of Agriculture graduation requirements.
USE OF CELLULAR PHONES AND PAGERS
As a courtesy to other students and to the instructor, all cell phones and pagers should be turned off
prior to class. Continued disregard of this policy may result in ejection from the course. If, due to
AGEC447 Fall 2014
medical or public safety concerns, a student needs an exception to this policy he/she should inform the
instructor prior to class.
IMPORTANT DATES
September 1 October 10 November 24 - 28
December 17 -
Labor Day – No class.
Fall Break
Thanksgiving break – No classes.
Final Exam – 10:00 – 11:50 a.m.
GRADING POLICY
The course grade will be based on the following factors, with weightings as indicated:
Test 1
Test 2
Final Exam
Application 1
Application 2
In-class quizzes
20%
20%
25%
10%
10%
15%
Total
100%
It is anticipated that an average for the course of 90% or above will earn an A or an A-, 80-89% a B+,
B or B-, 70-79% a C+, C or a C-, and 60-69% will earn a D+, D or a D-. Grade breaking points may be
lowered, but in no case will they be raised. The exact plus/minus grades will be evaluated only after
final numerical grades have been calculated.
EXAMS
There will be 2 in class exams and one final exam. Exams will be short answer and/or problem solving.
The final will be comprehensive. Makeup exams will be given only in extreme situations. All in-class
quizzes, which constitute 15% of the total grade, will be unannounced. No quizzes may be made up.
COURSE OUTLINE
August 25 – Intro
August 27 – Intro (continued)
August 29 – Out of Class Assignment
September 1– Market analysis project (no class)
September 3 – What is a futures contract? Who are the market participants?
September 5 – Contract specification (Different types of futures)
September 8 – Contract specification (Different types of futures – continued)
September 10 – Contract specification (continued) Limits
September 12 – Information Interpretation and Margins and Delivery
September 15 – Margins and Leverage
September 17 – Terminology
AGEC447 Fall 2014
September 19 – Test 1
September 22 – Price Determination
September 24 – Commodity Price Determination
September 26 – Futures Pricing
September 29 – Commodity Futures Hedging
October 1 – Commodity Futures Hedging
October 3 – Commodity Futures Hedging
October 6 – Fundamental vs. Technical Analysis
October 8 – Fundamental price analysis and USDA data
October 10 – No Class
October 13 – Technical analysis
October 15 – Technical analysis
October 17 – Currency and Forex
October 20 – Currency and Forex
October 22 – Other commodities
October 24 – Globex
October 27 – 24 hour trading
October 29 – Test 2
October 31 – Applications
November 3 – Applications
November 5 – Options
November 7 – Options
November 10 – Options
November 12 – Options - Applications discussion
November 14 – Applications – No class
November 17 – Turn In - Futures and Options Strategies
November 19 – Futures and Options Strategies - Applications Discussion
November 21 – Applications – no class but in class
December 1 – Swaps
December 3 – Derivatives
December 5 – Derivatives, Review
December 8 – Review
December 10 – Review
December 12 – Review
December 15 – Final Exam
NOTICES
Please be advised that this syllabus is tentative. All classes are different and we may or may not be
able to address all of the content areas or stick with the anticipated number of exams. Any deviations
from the syllabus will be announced as soon as possible.
9/8/14 wb
AGEC447 Fall 2014