Have you ever wondered what pork bellies are? It’s kind of a funny name for an investment, isn’t it? Before I got into commodities I used to hear about them and wonder what they were.
Pork bellies are the underside of a pig — the right and left side of the belly. They are what bacon is made out of.
And they are serious business. If you own a contract of bellies and the price goes up just $1 a pound you make $400. Of course, if it goes down $1 a pound you lose $400. Wow. That’s some kind of leverage, wouldn’t you say?
Below is a picture of a pork belly. Looks kind of like bacon, doesn’t it? Because that’s what they make bacon out of. Now you know.