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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: AllansAlias who wrote (14050)	9/20/2001 2:13:50 PM
From: martin001	Read Replies (3) \| Respond to of 209892

Interesting post from TraderAlan Actually looks like he posted from another source: Jon N from TM: "The clearing firms have cut the effective rates to market makers (Pros) by nearly 220 basis points. That means that those that were short stock will get significantly less interest on those positions than they were getting four hours ago. Conversely, those that are long stock are paying much less to carry (finance) those long positions. In a nutshell, the program trader that had on several billion dollars in short stocks vs. the S&P 500 is getting one heck of a lot less interest, making such a position very undesirable. The unwinding of those positions could create a vacuum to the upside, which must be partially responsible for the huge rally this afternoon. The biggest program traders (also know as basket traders) would normally try to lock in their short stock rates by hedging in other interest rate products, such as bonds or bills, but this new rate, which is tied to the effective Fed Funds rate, is virtually unhedgeable. In other words, the effect on program traders, which on a daily basis account for better than 22% of NYSE volume, could be a boost for the battered bulls and could signal that the bears have overstayed their welcome."