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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (5295)12/17/2001 3:29:48 PM
From: Henry Volquardsen  Read Replies (1) of 33421
 
interesting question John. my initial instinct is to say no, there is no consistent tendency for the banks to go short. There will be large differences between banks depending on the nature of their businesses. But more importantly they have a wider range of hedging instruments available and futures are a relatively small part of the market. In the commodity markets you mention the commercials businesses are pretty similar and the futures market is the only hedge and therefore the main arena. In the financials there are a lot of other hedging vehicles, such as otc derivatives and the bond and money markets, that the futures are only one small part of it and the main hedging occurs elsewhere.
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