Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (965)	10/14/1999 10:03:00 AM
From: Worswick	Read Replies (1) \| Respond to of 2794

Good for you Henry. Retired. The best of all possible worlds. Now you can be interested but disinterested. My reference to "puts"....forgive me Ashanti sold production forwards that it can't now deliver. I interpreted this as a "put"... against the ever declining price gold rather than "calls" which they really are. Do you think Henry we will have an "unravelling" of derivative positions here... if there develops the climate of a 1987 event? I am trying to avoid using the word debacle. Best to you, as always.. you very patient man Clark

To: Henry Volquardsen who wrote (965)	10/14/1999 12:39:00 PM
From: Michael Friesen	Read Replies (1) \| Respond to of 2794

Re: gold mining companies losing $$$ According to the Globe & Mail here, most of the companies in trouble did something called a 'delta hedge.' What that consists of is buying 1 put to sell their future production, and then selling 2 higher out of the money calls to pay for the put. For a while this seemed like a surefire thing. For a while. As the gold price started to rise, the "delta hedge" thus became a net short position. That's a lesson to me if I ever listen to anyone trying to sell me insurance that doesn't cost anything!