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To: freeus who wrote (67491)	9/25/1998 1:26:00 PM
From: Chuzzlewit	Respond to of 176387

OT A tranche is a split of some sort on a security. You then end up with derivatives -- i.e. securities based on an underlying security. For example, you could strip off dividends from AT&T stock and sell them as a separate security from the AT&T selling without dividends. You have created two new securities. Now you are ready for a job on Wall Street! <VBG> Seriously, these derivative securities are ways of parceling out the risk. For example, in the AT&T example, holding a right to future dividends is much less risky than owning the security ex-dividend. Which mean that the "stripped" security will be much more risky, and the dividend security will be much more of a widows' and orphans' security. Hedge funds do a lot of this sort of thing. TTFN, CTC