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About those cattle futures

Slingshot Bob said:
You obviously know more about this field than me, I was just surprised that Wikipedia actually criticized her. Smells a bit fishy.
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Thanks for your understanding.

Yeah, that's why Wikipedia cannot be cited as a source in academic papers or other academic materials. Anyone with account status can post, and it stays until someone else catches it and changes it. I've seen plenty of mistakes over the years while I was using it.

That being said, it is fair in Wiki to point out a claim as long as it's done fairly.

BTW - during the 1987 crash there was a University of Chicago MBA class, that as a class project purchased a substantial but really cheap out-of-the-money put option contract, in the OEX pit at the Chicago Board Options Exchange. The market lost a quarter of it's value that Monday, with futures markets even more volatile! The OEX crashed through their strike price, turning 600 bucks into $110K over night.

It made the local newspapers!

There was a crowd of bottom feeders that made a relatively frugal living (by exchange standards), by selling way out of the money naked (uncovered) put options for nickles and dimes. They never paid-out, because the market never fell low enough for the options to be exercised. The options simply expired, and these guys pocketed their premiums. Well, that Monday many if not most of these guys got knocked out of business! (along with a host of others)
 
Chomsky said:
Thanks for your understanding.

Yeah, that's why Wikipedia cannot be cited as a source in academic papers or other academic materials. Anyone with account status can post, and it stays until someone else catches it and changes it. I've seen plenty of mistakes over the years while I was using it.

That being said, it is fair in Wiki to point out a claim as long as it's done fairly.

BTW - during the 1987 crash there was a University of Chicago MBA class, that as a class project purchased a substantial but really cheap out-of-the-money put option contract, in the OEX pit at the Chicago Board Options Exchange. The market lost a quarter of it's value that Monday, with futures markets even more volatile! The OEX crashed through their strike price, turning 600 bucks into $110K over night.

It made the local newspapers!

There was a crowd of bottom feeders that made a relatively frugal living (by exchange standards), by selling way out of the money naked (uncovered) put options for nickles and dimes. They never paid-out, because the market never fell low enough for the options to be exercised. The options simply expired, and these guys pocketed their premiums. Well, that Monday many if not most of these guys got knocked out of business! (along with a host of others)
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Yeah, but I still smell a rotten fish, I doubt Hillary is spotless on this, she has a long and well known history of corruption.
 
Slingshot Bob said:
So 1 grand, turns into 100 grand in the 70's? Could you adjust the numbers to todays capital and show us where such an enormous gain happens in 10 months?
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You don't even need to convert to today's money, which is roughly a factor of 5X, BTW.

It was all in my first post. She was having intra-day movements of 16-40K.

Commodity futures are highly leveraged instruments. It's not like buying a stock, and hoping to get 7% annually. And she may have been trading futures options, which are even more leveraged and volatile. Plus she wasn't required to post margin, which means she's even more highly leveraged.

If not familiar, take a quick look online somewhere as to how highly leveraged these types of financial instruments are. These aren't your grandparents' utility stocks and U.S. Savings Bonds!
 
Chomsky said:
I followed those three links, and they all linked back to one study that is behind a pay wall.

It seems these odds might be derived from putting a lump sum in the market, and letting it ride. But that's not what her trader did. He entered and exited the market as a day trader, riding the momentum. At one point he was down a 100K of her money. At other points, he lost and gained as much as 16-40K per day on her behalf.

I'd need to see the exact method of the claim determine those odds, but they are highly suspect. Hillary's partner's trading patterns are within the normal patterns I saw when working in this very business. In fact, I've seen far more volatile. We're speaking highly leveraged trading here, which was even more highly leveraged by a factor of 10 or more, due to her not being liable for margin. That's a big deal.

There's nothing unusual here besides her not being required to place margin. And to see why there was no margin requirement, we'd need to see how her account was structure. If her trader friend let her trade through his account, then his account provided the margin. And that may have been their agreement.

The only question I see, is why did this trading partner let her go margin free?
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The future deal stunk all the way to the bank

There are a couple things unusual in the futures scandal. You don't simply read the journal while in the bathroom and suddenly become an expert day or options trader. It's also not a passive investment. Traders monitor constantly.

Second, no broker that I know of would allow a new market player to deal in short contracts, and no broker would allow short sales based on a thousand dollar account. The reason is simple. On the long side, there is a loss limit of all your money. On the short side there is no limit. Options (futures) are a zero sum game. If Hillary made a hundred K, then somebody lost a hundred K. They could have lost far more.

Third, Margin calls are required by all brokers and regulated by the government. Currently I think the margin requirement is 25%.

Fourth, Options trades could be a very easy way to launder money. ABC corp buys long. XYZ sells short. Whichever side loses, the trade is terminated. The other side picks up the gain.

I'm not saying that happened, but it would explain a lot.
 
Slingshot Bob said:
Shady as hell. Cant convince me, this was above board.
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Agreed. But nothing new.

Did you realize that congress is constantly getting insider information and can form public policy based on that insider information, to further the congress people's own financial advantage, and further, that it's law (that congress passed in the middle of the night) they can't be prosecuted for using this insider information?

Yeah, corrupt as hell, congress. Has been for a long, long time, and it's become time to flush all the members down the drain and elect a completely new set. The ones we have now are beyond repair.
 
eohrnberger said:
Agreed. But nothing new.

Did you realize that congress is constantly getting insider information and can form public policy based on that insider information, to further the congress people's own financial advantage, and further, that it's law (that congress passed in the middle of the night) they can't be prosecuted for using this insider information?

Yeah, corrupt as hell, congress. Has been for a long, long time, and it's become time to flush all the members down the drain and elect a completely new set. The ones we have now are beyond repair.
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Like this hush $ fund for sexual harrassement, that was recently, exposed!
 
Slingshot Bob said:
Like this hush $ fund for sexual harrassement, that was recently, exposed!
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You know, if the individual congressmen were responsible for their own bills, caused by their own misbehavior, fine.
To fleece the tax payer for it. Oh hell no!
 
Chomsky said:
Did you ommit reading my post in entirety? Particuliarly that I bolded below?

No, I didn't.

Can you cite them, and explain please? I'd like to know how they're derived.
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I seriously doubt the odds are anywhere near a thousand to one, People double their money overnite fairly often. People also lose it all overnite.
 
TobyOne said:
Uh yeah, thats a big deal. There are many trading strategies that are successful but require a lot of capital. If they waived the margin requirements, the fix was in.
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Except, of course, that there's no evidence that any fix was in. Only empty speculation. Like almost every charged leveled at her over the years.

Yawn.
 
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