Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: smolejv@gmx.net who wrote (22137)	8/5/2002 2:54:07 PM
From: Steve Lee	Read Replies (1) of 74559

"...1$ equity to 680$+ dollars of commitments..." Are you confusing notional values with commitments. I can buy an August 50 call contract on a $10 stock for 5 cents. The notional value of that contract is $1000. The capital at risk (my commitment) is $5. I have a equity to notional value ratio of 1:200 but they are just numbers. Notional values are just a notion. These big numbers are bandied about for dramatic effect but they are not a window on a problem.

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