Speaking of derivatives---- This is a little spoof in our local paper today-- excerpts----
" Just kidding. Actually the Nortel thing has been one of our most profitable bits of arb ever. We just shorted Teleglobe, used the proceeds to buy the old BCE, did the carry trade into Mexican pesos, used the coupons to go long on the new Nortel, set up a straddle across to the Irish software index, shorted the BCE stub, backed out the proceeds from selling our Nortel, put half of that money back into CGI stock, used the rest for margin and loaded up on Nortel again, and then just sat there on our Euros. Made a ton. At least I think we did. Computers overheating, working it all out. Sent a trainee to get a printout and as soon as he touched the thing... Well you wouldn't
't believe the smell."
The reply----
" Dante my son, I hear your little arb play is gonna make you either filthy rich or bankrupt, no doubt the latter.
You should have come to the master arbiste--me-- for a bit of helpful instruction. You should have shorted Nortel, used the proceeds to butterfly the BCE stub'semi preffered, long call-put warrants, bridged the whole glorious mess into hollinger liquid yield option notes and gone long double reverse floaters against treasuries in the Ugandan futures pit. Followed of course, by a straddle over your delightful secretary, Carmel. Believe me it can't fail. Well it did once, and we ended up owning two-thirds of Sub-Saharan Africa's palm oil crop, but we managed to unload it on a CIA operative disguised as a Boomerangah tree at a small profit." |
