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Gold/Mining/Energy : Gold Derivatives -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (7)	9/22/1998 9:05:00 AM
From: IngotWeTrust	Read Replies (1) \| Respond to of 39

marcos asks: massive short position on gold? A resounding yes, Marcos. And a very gossamer woven synthetic short it is... about as "gossamer" as the emperor/fakir's fabled fashionwear

To: marcos who wrote (7)	9/22/1998 5:50:00 PM
From: Zardoz	Respond to of 39

As many have pointed out, sooner or later all the short positions in Gold will need to be covered. But a person need not go to the spot market to cover them. Simple example is the purchase of a call option against a short sale. And thus becoming market neutral. I did the oposite with my TIP's. I had a put option, and bought the TIP to lock in the profit of the option, and than {tried to buy T:CM, see noone posts on Banks anymore} sold the TIP's later in the day. Reopening up the option position. I think Teevee made an important comment about the failure of the IMF to get further funding. This will put a crunch on more Asian countries to cut to the bottom line. And a further selling of Gold to feed the masses, and prevent uprisings. Here is a website, recently passed on to me: {haven't looked} adtrading.com As can be seen by this: mypage.direct.ca Gold is still over valued. The horizon is USD strngth versus a basket of currencies. As the points move to the right, the US dollar is strengthening. And the left, weakening. As it goes up, the Price of gold versus the basket of currencies {excludes USD} is strengthing. The idea point is in the middle, where price change of gold is zero. You short GOLD when the points are to the upper most left, and go long, lower right. If I should a chart of all the data from 1971 to today, you'd notice that the volatility has been decreasing year over year. Even during the spikes of gold to $600+. Hedge funds need a fixed amount of volatility to make money against postions. My GUESS is it's around 5%{based on option strikes spreads}, which is about the (280*0.05)= $14 volatility in gold spot price. This is why companies like ABX {on the XAU} hold up well as gold goes down. They are setting up a hedge. The reason I usually talk about stock options, is that few here can run off to the brokerages houses and pay for a embedded option.