TELK -- Telik, Inc. Message Board

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Biotech / Medical : TELK -- Telik, Inc.

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From: Doc Bones	1/10/2007 12:23:43 PM
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I believe that IBs can invent any type of derivative, and keep it unreported. I think Peter has mentioned it. The derivative market is massive. This is from the Wikipedia entry [not great] on IBs and how they make money: For example, trading bonds and equities for customers is now a commodity business [citation needed], but structuring and trading derivatives is highly profitable [citation needed]. Each OTC contract has to be uniquely structured and could involve complex pay-off and risk profiles. Listed option contracts are traded through major exchanges, such as the the CBOE, and are almost as commoditized as general equity securities. The option MMs I knew spent most of their time figuring how to avoid taking positions on a stock - they want to scalp nickels and dimes without risk. IBs are much more likely to assume risk. Doc

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