Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: James F. Hopkins who wrote (24501)	8/17/1998 11:34:00 AM
From: yard_man	Read Replies (2) of 94695

Hedging of course requires that somebody else take the other side of the position, right? Someone has to lose for the hedging to work. This is something that ought to be thought about. All our banks hedged their lending to institutions in Asia -- great, way to go, as long as the other parties perform their end of the contract! Some have suggested that in a market crash -- put options might not be "payable." Seems remote to me, but not out of the realm of possibility. Certainly in a 20 - 30% decline, some folks who take the other side of these positions would go out of business.

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