wolfbinary wrote:
"convertible arbitrage on the buy side" huh? You are in too deep
"convertible" = Convertible bonds... Bonds (Kind of like loans given to companies) that can be converted into shares of stock. Very complicated instruments, traded by a very small subset of hedge funds. "arbitrage" = The prices of CBs move up and down in relation to the price of the stock they convert into, but it's not an instant reaction... As an analogy: Hot dogs (with buns) are $1 a piece... Buns are $0.25. Buns suddenly rise in price to $0.30, but the hot dog vendors haven't updated their prices yet... So we buy hot dogs right away, because we know that when they post their new price tomorrow, it'll probably be $1.05 to take the new bun price into account, so we'll sell it to someone for $1.05 tomorrow and make $0.05 in profit. That's arbitrage... You trade based on correlation between related or unrelated products. Not a perfect analogy, but it's kinda the idea. "buy side" = We're not one of the big firms that sell to everyone and keep huge lists of customers. We're a customer, buying from those big guys and selling to other big guys.
wolfbinary wrote:
When you say portion do you mean more or less than half? :laugh: ;-P I know the whole industry isn't, but it's not the good part people are usually talking about. There are legitimate functions they serve, but obviously the fraud portion is the portion that's taken over the bulk of things in the big companies or they wouldn't have so spectacularly blown things up.
It's not that the fraud portion is the bulk of the companies... It's that everything is so connected that a problem in one group can affect all of the other groups. When the mortgage sector takes a dive*, it affects the credit curves, which affect the bond markets, which hit the stock markets... Everything is connected. It really doesn't take much to topple a wall street firm. The difference between "We're fine" and "We're bankrupt" can be one pervasive rumor, one typo in an earnings report, or one messed-up decimal point in a trading system. * Not an actual researched example... I don't know how it all actually flowed... Just illustrating...
wolfbinary wrote:
Have you sold many copies of your novel?
No... But I have to keep trying...
Proud to have finally moved to the A-