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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: Win-Lose-Draw who wrote (14412)	11/9/2002 4:50:38 PM
From: At_The_Ask	Read Replies (1) \| Respond to of 30712

I find it unlikely that JPM or anyone else that sells derivatives acts as the counter party to every trade. They create superleveraged paper and sell one half to one party and the offsetting position to another. They make money on the spread not by betting against everyone they trade with. These guys haven't been around for a couple of hundred years by being stupid. Believing that they can be wiped out by something like this is like thinking that equity option writing firms will be wiped out by movements in underlying stocks, very unlikely as they play the trades both ways. Hedge and pension fund mangers that buy these things are the ones who get their faces ripped off.