US Commercial banks alone own an unbelievable $202 trillion in derivatives.

Discussion in 'Wall St. News' started by ByLoSellHi, Aug 4, 2009.

  1. Feel free to post a screen-shot of your trading this morning and I will refrain from calling you out as a "prop-poster" that doesn't TRADE at all.

    Your move.
     
    #21     Aug 5, 2009


  2. :cool:
     
    #22     Aug 5, 2009
  3. Actually, how about a simple illustration of how fallacious the author's logic is? Let's use a simple derivative, a short-term interest rate (STIR) future, e.g. eurodollar.

    Currently, the Sep9 Eurodollar contract open interest stands at arnd 1mn. A single Eurodollar contract notional value is $1mn, which, basically, suggests that the mkt's total notional exposure is arnd $1trn, which is rather large. However, the risk of one contract is only $25/bp. If you do the arithmetic, you'll have to conclude that the author's 1% of notional at risk assumption suggests that they think a move of 400bps in the front Eurodollar contract is "conservative".

    It's just crap reporting, is all...
     
    #23     Aug 5, 2009
  4. You may be perfectly right, and Landis would still be a big, fat crybaby.
     
    #24     Aug 5, 2009