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To: Temple Williams who wrote (59058)	9/17/2000 9:03:02 PM
From: Follies	Respond to of 99985

I just read your post and was about to respond with "What a load of BS". Then I saw who posted it and I said to myself "what is it that I am not understanding". I have seen pressure above and below fair value of 2 to 3 days at most. Are you saying that this is going on longer and deeper? Arbs will bring it back in line. I have to run to dinner, I will check back in a few hours, but for those who dont know, Temple Williams is one of the best spoos players around, no BS.

To: Temple Williams who wrote (59058)	9/17/2000 10:45:08 PM
From: StockOperator	Read Replies (1) \| Respond to of 99985

Temple, Just wanted to say that I've spent the past hour at your web site. What an enjoyable read! Your dedication to "your business" is evident in the time you must spend writing and sharing your many hard earned lessons. Keep up the great work - I have you bookmarked. Regards, SO

To: Temple Williams who wrote (59058)	9/17/2000 10:48:21 PM
From: Casaubon	Respond to of 99985

truly frightening stuff. Thanks.

To: Temple Williams who wrote (59058)	9/18/2000 12:19:07 AM
From: Gersh Avery	Respond to of 99985

Hi Temple Thanks for the post. I'm wondering if prem as measured by percentage of the index itself would show the same thing. I don't have the data to check or I would plot it out myself. As I understand it, large firms generate supply of SP00 contracts to gain a kind of interest. They go long stock and write contracts that represent the stock that they own. They then pocket the prem. At that point they don't care if the market goes up or down. If existing interest rates are able to get them better gains elsewhere then that is where their play goes.(given, roughly, the same level of risk) Thus when demand outpaces supply for the futures contracts, the prem goes up attracting this type of arb play. Which, in turn, brings the prem back down again. (And, I might add, making an even larger institutional overall short) Does all this make sense? I believe (and I could be way off) that prem in the SP00 is dependant on supply/demand and current interest rates. Please correct me if I have it off. Thanks Gersh

To: Temple Williams who wrote (59058)	9/18/2000 1:25:00 AM
From: Gersh Avery	Read Replies (1) \| Respond to of 99985

Hi Temple .. Sorry .. part two. Something that may interest you. You might wish to look at prem two days before contract expires. The reason that I mention it is because of this latest roll over time. Many people had mentioned the very large OI on the September contract. I took note of that and proposed a method to take advantage of the situation. My thinking was that this large OI situation would have to be resolved when the contracts expired. As these contracts would most likely be hedged, the resolution would take one of two actions. Either sell the underlying stock or roll over the contract. The action of rolling over the contract would have the effect of raising the prem on the Sept while depressing the prem on the Dec. My suggested potential method, at that time, was that, during intraday trading, every time a person would do a sell to use the Dec and when doing a buy to use the Sept. Net at expiration would be short Dec and long Sept to take advantage of the roll over that would be taking place. So while the December prem was depressed as a result of roll over I believe that the Sept was high at the same time. Now then .. I haven't even looked at that data to confirm that this took place .. so if you want to look go for it .. Yes .. you are right about the Dec prem being depressed.