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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Sword who wrote (1783)	9/24/1998 3:16:00 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 3339

"not substantial"??? Based on what? Past historical precedent? You should really ask her not me ;) But I think they were talking about stocks purchased on margin (i.e your standard 50% margin) as a percentage of market positions. Our financial model may be wrong. Derivatives margin of 95% or more is the possible wild card. We may be in for a market "singularity", far beyond our imagination. Or they may not be wrong and we may be ok for the most parts. How do you know. It is not the notional size of the derivative that matters; it is the characteristics of the underlying. I will happily buy a $100,000 worth of German Bundes and sell a $100,000 Yen as a hedge trade with 10% margin and sleep easy at night. But trading Russian Rubles with no margin at all would still keep me awake in cold sweat. The details are everything here, and we just don't have all of them. Sun Tzu