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Gold/Mining/Energy : Gold Price Monitor

GDXJ 110.89

+1.8%

Dec 10 4:00 PM EST

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To: Ken Benes who wrote (53921)	6/8/2000 10:20:00 AM
From: lorne	Read Replies (1) of 116810

Bullion Banks' $190 bn Derivatives Position Posted: 2000/06/7 11:20 PM GMT+2 Jessica Cross, head of Virtual Metals Research and Consulting . " Jessica's comment about the GATA thesis is: "one plus one equals twenty". Say a mining company sells 10 tons forward on the derivatives market. The counterparty (i.e. bank) takes on to its book a long position of 10 tons which it immediately offsets by selling forward 10 tons. The net position of the bank is zero, but the turnover is 20 tons and is reflected in the OCC numbers. A few weeks later the mining company elects to buy back 5 tons of its forward sale and the bank which now has a 5 ton short position, offsets it by purchasing 5 tons from another bullion bank. The commercial bank's derivatives exposure is zero, but the OCC position is 30 tons and so on. Options deals result in even more paper trading which clocks up OCC and BIS turnover." Full story >>> mny.co.za

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