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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: MythMan who wrote (333723)4/13/2007 6:41:00 PM
From: Real Man  Read Replies (1) of 436258
 
What was 2/27? Banks, GS, and others make sure their computers
are very fast in calculating volativity as it changes. So,
when there is a spike, they need to hedge all the mountain
of puts that sits out there (that they have written)
by selling futures, all
according to the magic Black-Scholed formula that makes
them money regularly on stupid bears, and rabid bulls. Thus,
computers made the little drop a little faster -g-

1987 type crash today needs to happen a lot faster, before
the Fed can respond. They are there to protect the "system",
yet the protection itself causes moral hazard.
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