The Dukes' agent has the fake crop report saying that the weather was bad and the harvest was less than normal. Therefore, he is expecting high prices. Valentine and Winthorpe have the real crop report and know that prices will go down when it is revealed.
The agent wants to own as many contracts as possible before the crop report is revealed, since (he thinks) once it is, the price will go up and he can sell at a profit. Trading begins with a price of 102 cents per pound, which translates into $15,300 per contract. Once everyone sees that the Dukes' agent is trying to corner the market, they all want a piece of it, forcing the price up since more people are buying than selling.
At a moment timed for maximum dramatic impact, Valentine and Winthorpe make their first move: "Sell [unintelligible] in April at 142!" They're selling short: selling contracts they don't yet hold. They are betting they will be able to buy the contracts later at a lower price so they come out making money but not holding any contracts at the end of trading.
Now that there is another source of contracts available, the other agents buy from Valentine and Winthorpe as fast as the duo can write the orders. This has the effect of driving the price down somewhat, since there are now more sellers than there were before; by the time everybody pauses to hear the crop report, the price is back down to 102 cents per contract (interestingly, right where it was at the start of trading). The crop report is revealed and the price starts dropping as everyone tries to get rid of their contracts ("zero their positions") before the bottom drops out or trading ends.
At a moment timed for maximum dramatic impact (about 46 cents per pound), Valentine and Winthorpe make their second move. They need to buy--a lot--to zero their position, and the crowd is more than willing to oblige. An important point here is that they don't buy any from the Dukes' agent; after all, they want him to be left holding the bag at the end of trading. When that time comes, the price is 29 cents per pound, and Valentine and Winthorpe have delivered on all their short-sold contracts.
Now let's generate some brown numbers. It sounds like Winthorpe says "20,000," so let's go with that as the total number of contracts they moved. Let's assume they sold short at a constant rate from the time the price was 142 until the time the price was 102. From this, we can figure an average price per contract of 122 cents per pound. Likewise, let's assume they bought at a constant rate from the time the price was 46 cents per pound until the end (29 cents per pound), which yields an average price per contract of 38 cents per pound.
Profits: (122 cents/pound - 38 cents/pound) * 15000 pounds/contract * 20000 contracts = $252,000,000.00.
