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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: VS who wrote (19492)	8/24/1998 10:53:00 PM
From: Tom Trader	Respond to of 50167

Hi Vince -- thanks for your response It does appear that you are familiar with this product--since my discussions with my broker have surfaced a structure akin to what you were describing--still have not seen the prospectus -- though a convo with my broker subsequent to the post to Iqbal surfaced the fact that there would be phantom income. You are right that similar products have been offered on other indices. A few months ago, on a basket of Asian indexes--I told him at the time that I did not feel that the time was opportune for this investment. >>The upside participation is usually a little more complex than it first would appear. It is usually based on quarterly or annual averaging of returns. So, if the Nikkei goes from 15k to 30k, your investment may or may not grow by the amount you assumed. It would depend on the return over each averaging period.<< I am glad that you mentioned this--I shall review the prospectus closely to see whether this is the case. >>Your broker will probably kill me for suggesting this, but it appears to me that most investors can bypass paying the charges and fees by creating the product themselves. You could do it by buying a treasury strip and JPN index options. << This is why I feel that you have this nailed--because it seems to bear some resemblence to what he was describing as being the structure. I think that I understand the gist of what you are saying--but could you perhaps elaborate on how exactly this would work. And as far as by-passing the fees--I am all game for that:)