What is a position list and why do traders check it every morning?

A position list is an overview of what you have bought, what you have sold and what you hold in stock, per product and per delivery period. The difference is your open position: long when you have more than you have sold, short when you have sold more than you have. Traders check it every morning because it is the starting point for the day: what you can offer, what you still need to buy and which deliveries need attention.

What does a position list show?

The layout differs per company, but most position lists contain the same elements:

• product and quality, for example SMP medium heat, food grade
• delivery period, usually per month
• quantity bought on open purchase contracts
• quantity sold on open sales contracts
• stock, including goods in transit
• the net position: long or short
• average purchase and sales prices

A simplified example:

This trader is short 20 t of SMP for October and long 50 t for November. Taken together that looks like a comfortable long position, but the October shortfall needs to be covered first. Why the split per period and per quality matters is explained in more detail in How do you track your position in dairy ingredient trading?

Why check it every morning?

A lot changes between the end of one working day and the start of the next:

• Customers and suppliers in other time zones send call-offs, confirmations and changes outside your office hours.
• Colleagues closed deals or booked deliveries late the previous day.
• Market prices moved, for example after a Global Dairy Trade auction or a new weekly quotation.

If you start calling customers without knowing your current position, you risk offering product you no longer have, or missing a shortfall that is cheaper to cover today than next week. A morning check also catches entry errors early: an unexpected figure is often a contract or delivery that was booked incorrectly, and that is easier to correct the same day.

A morning routine in five steps

1. Start with the nearest periods. A short position for this month needs cover now; a short position in four months leaves room to choose your moment.
2. Look at changes since yesterday. Trace every large change back to the contract or order behind it.
3. Compare stock with what customers will call off. Can you ship what is planned for the coming weeks, and from which location?
4. Check prices. Compare your average purchase and sales prices per product with the current market. See What is mark-to-market and why does every dairy trader need it?
5. Decide on actions. Buy, offer, chase a call-off or move a delivery.

Position list in a spreadsheet or in trading software

In a spreadsheet, the position list is a separate file put together from contract lists and stock data. It is only as current as the last update, and someone has to make that update.

In Moo Software, the position list is calculated from the contracts, orders and stock you already record. As soon as an order is entered, positions, planning and stock are updated. You decide whether planned orders are included and how prices are calculated, for example as weighted averages. Credit and position limits help flag positions that exceed what your company has agreed.

See it with your own data

Want to see how the position list works with your own products and contracts? Demo buchen or Kontaktieren Sie uns.