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

To: Worswick who wrote (966)	10/15/1999 9:15:00 AM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 2794

Hi Clark, I did a little further checking and as you said Ashanti was selling calls against their production as well as buying puts. Both have gone against them. I assume your reference to an unravelling of derivative positions in a repeat of a 1987 scenario refers to the broader market and not just the gold markets. The easy answer of course is yes, if we see an event as severe as 1987 there will be problems in all markets not just derivatives. Fwiw I traded derivatives through the 87 events and had very large positions. The market had problems but survived fairly well and that was during a period when the capital structure of the banking system was much weaker. The capital structure of the US banking system is significantly stronger now. Also a crash such as 87 would not by nature be bad for derivatives. In 87 I was having a lousy year going into October. But the week of the crash was my most profitable 'year' ever up to that point and I wound up having a pretty good year. And I was not alone a lot of people wound up doing pretty well. A side note, I had a medical check up scheduled for THE Monday at 5:00....right after the close. The doctor took one look at my face and took my blood pressure right away. It was something outrageous like 180/140 but may have been higher. She completely freaked. She was about to call an ambulance and have me hospitalized. I explained what had been going on in the market and she made me sit in her office until my blood pressure came back to normal, it took two hours :) One last thing fwiw, I am not expecting a repeat of 87.