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How I Caused the 1987 Crash

Bruce Krasting's picture




 

 

I got a chuckle from the biz blogs and TV yesterday with the rehash of the 1987 stock crash. Twenty-five years is a very long time. I’d forgotten most of the events of that day.

 

I was at Drexel, and at that time, Drexel was a powerhouse. The firm had plenty of capital and huge capacity to borrow money to fund positions. Money was rolling in; risk taking was encouraged. I was working with a small group of people on one of the screwier sub-sets of the high yield bond market. It was referred to as LDC debt (Less Developed Country debt). These were the busted bank loans of all of the countries in South America.

 

You might wonder why anyone would spend time mucking around with the debts of Brazil, Mexico, Argentina and Chile. Actually, it was a great business. We were coining money. The key to our (and others) success was the ability to make a price on illiquid assets. If some regional bank needed to sell $25Mn of Brazilian debt, we would make a bid on the phone. If a company were in need of some Mexican debt that would be used in a debt for equity transaction, we would offer the paper to the buyer, even though we did not own it.

 

My old days of currency trading came in handy as some of the paper we traded was denominated in currencies other than the dollar . The fact that I had a “license” to trade currencies gave me the opportunity to speculate pretty freely, and I/we did. The shop that I worked in was no different than any other on Wall Street. We had a “book” of positions. Some were outright specs, others were hedges against commitments we had made. To hold this book together, we required equity (cash).

 

The Crash of 1987 happened on a Monday. But the crash really started the week before. The S&P tanked 9% on the week, Friday was a particularly bad day. The big move in stocks set things in motion over a very nervous weekend. I got the call from the controller’s office on Saturday. It went like this:

 

Controller:

Hi, Sorry to bother you, but we have some issues with our bank lenders (It was Bankers Trust that first pulled the plug on street liquidity). They are nervous, and want to cut back our funding lines. You are using a fair bit of capital in your trading book. Can you tell me what all this money is being used for?

 

BK:

Sure. We have a matched book of longs and shorts on the prop trading side. We also have some open currency positions. We have an inventory of hedges against open client positions. We also have some naked longs.

 

Controller:

Ah, can you be more specific?

 

BK:

Sure. We are long Brazil, Mexico and Chile; we are short Ecuador, Peru and Venezuela. We are naked short the USDHK$ and have $60Mn of Cuban bonds in inventory.

 

Controller:

You’re shitting me! What is that junk? Is any of this liquid? Can you sell this book of crap?

 

BK:

I might be able to run things down a bit. How much time do I have?

 

Controller:

Cut it in half by Monday night.

 

And that is how the crash of 87 happened.

 

Sunday night October 19, at the opening in Tokyo the HK$ position was closed off (at a loss of course). I got up at 2am and started the calls to London where there was a market for LDC paper. I was hitting bids on anything I could. The prices for the long assets were getting clobbered. There was no liquidity in the markets I was short. It was about minimizing losses and cutting a book. There was no finesse about it.

 

Of course I was not alone in those early morning hours. Hundreds of players from NYC were on the phone hitting bids on all sorts of squirrely assets. The folks who make markets in London were never dopes. When their phones lit up with Americans looking to lighten up, they voted with their feet. Bids for everything dropped like a stone. By eight o’clock in NY everyone knew that wholesale liquidations were going on, and that stocks were going to get beat to a pulp when the market opened up.

 

I think I stood all of that day. The phones rang and rang. Both buy and sell side clients were panicked. Most were sellers; the buyers went on strike. Prices were dropping without any trading taking place. The brokers were all, “offered without the bid”. It was next to impossible to get trades off.

 

Some where’s around 2pm NY time, the Cuban paper got sold (more losses). There was not much more that could be done. So I sat down and watched the Reuters screen and the Dow tape for the rest of the day. I’d had next to no sleep, drank a ton of coffee and smoked too many cigarettes. I'd sweated all day, and stank. I left before the 4pm close.

 

To me, there are today many similarities to the market conditions that triggered the 87 crash. These two ring a bell:

 

In 87 I bet on Cuban paper. The rumor at the time was that Castro was sick. The thinking was that when he died, the bonds would increase in value. I’d bought the bonds at around 5 cents on the dollar. Exactly the same bet, for the same reason, is being made today:

 

 

The Hong Kong dollar was pegged to the USD in 1983. Four years later guys like me were betting that the central bank could not hold the peg. Money was flowing into Hong Kong; the central bank was forced to intervene in the market to keep the lid on the HK$. This same trade is popular today:

 

 

The most important comparison has not yet shown up yet in 2012. In 1987, over the course of a weekend (and many panicky phone calls), market liquidity and the ability to finance off-the-run assets dried up. It started at the bottom of the rung of asset quality, by the end of the day it had spread to the most liquid stocks.

 

On Thursday, October 15, 1987, the farthest thing from my mind was a squeeze on the equity capital I was using to support a book of business. If anything, I was (everyone was) being encouraged to put more money to work. That vaporized in hours. It was one giant “risk off” event.

 

There were no external factors of significance that led to the 87 crash. The market did itself in on that day. All it took was a few calls that said, “I want you to cut back at open”.

 

The repo markets that fund the zillions of assets (good and bad) in 2012 are exponentially larger and more complex than in 1987. If anything, that market is more vulnerable today to the call that says, “Cut it back”.

 

Note:

Of course I didn't really start the 87 crash. I was a small cog in a very big wheel. There were thousands of folks who were scrambling on that day.

On Monday night, 10/19/87 the Fed (Greenspan) called the heads of the big banks and told them to open the spigots. The Repo markets were flush with cash on Tuesday morning.

From my perspective, it was much ado about nothing.

 

 

 

 

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Mon, 10/22/2012 - 23:03 | 2911654 cgagw
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Mon, 10/22/2012 - 07:35 | 2909053 ZeroPower
ZeroPower's picture

Nice post Bruce. I sit on an equally esoteric trading desk right now (CEEMEA cash bonds and some synthetic) and as I watch liquidity dry up certain days (depending on news and flows) I just wonder what it's going to be like here when a real big black swan occurs. Too young to remember '87, but love reading "old-timers'" accounts of it.

Mon, 10/22/2012 - 01:29 | 2908942 malek
malek's picture

 the central bank was forced to intervene in the market to keep the lid on the HK$. This same trade is popular today

Me wonders that the current CHF doesn't come to your mind.

In my feeling (unconfined by knowledge or trading experience) this is not it yet. It's a harbinger, the next group of events like those we had in the last days will likely be the trigger for a crash.

Sun, 10/21/2012 - 22:25 | 2908774 chump666
chump666's picture

Hang Seng just went green, DXY under pressure and gold/oil bids in.  Crash delayed. Marketwatch '1987' hysteria last Thursday, got us 200-, it was nice.

But as far as a flash crash is concerned.  Could happen at anytime, with those pesky f*cked up machines trading the MA's

 

Mon, 10/22/2012 - 01:05 | 2908922 Orly
Orly's picture

Drumming down the yen and drumming up the Euro during the light Asian session.  The Nikkei ramps on yen weakness!  Yay!

The real tell will be the London session.  I am thinking that it will be more of the same, though, and you're right...crash delayed.  Strangest "market" ever.

:D

Sun, 10/21/2012 - 21:10 | 2908650 vachon
vachon's picture

Mr. Krasting,

Good read.  In 1987, you (and many others) were working with the assumption  that the cash to fund your book was available and easy to get to.  With the spigot turned (way) down, the book went bust.

What would you say is/are the assumtions today's books are operating with?  I keep hearing about the predictability of the Bernanke put or excess deposits or gold stashes.  Very much like housing will never go down.

 

 

 

 

Sun, 10/21/2012 - 22:28 | 2908733 Bruce Krasting
Bruce Krasting's picture

I think the Fed (and other CBs) have created a global market based on the Greater Fool Theory.

I am willing to buy an asset today at a 'foolish' price, because I'm convinced that a greater fool than me will pay yet a higher price tomorrow. (think Treasury bonds)

You ask how much equity is in the system today? If you include both governments and the private sector, the "equity" is a negative number.

So there is nothing beneath the pile of paper but air.

Sun, 10/21/2012 - 17:49 | 2908360 Ned Zeppelin
Ned Zeppelin's picture

Today there would be no need for the Monday call from Bernanke - the spigots are already wide open, and "cash for trash" between the bankers of Wall Street and the Fed is in full force and effect.  Nothing is too shitty to be swapped for freshly pixeled FRNs. 

Sun, 10/21/2012 - 17:50 | 2908359 tempo
tempo's picture

Nothing has changed...In 1987 Greenspan flooded the market, in 2012 and forever Bernake floods the market with liquidity. So no crash is possible until....

Sun, 10/21/2012 - 12:00 | 2907773 resurger
resurger's picture

This is nice BK

Sun, 10/21/2012 - 11:46 | 2907753 shovelhead
shovelhead's picture

Good read Bruce.

A sobering thought that if a steer on the edge of a herd gets stung by a bee and runs,  that the whole herd will soon stampede until they tire.

Which is fine if they happen to be on a wide open prairie. Some get run over but most get some exercise. No big deal.

Not so good on a high plateau surrounded by cliffs.

Derivatives are the edge of the plateau the steers are going to run over.

Gravity is a heartless bitch when you're in freefall.

The Feds safety net might be fast enough to catch only hamburger. Can the Fed really cover every debt on the planet?

One little bee...Bzzzz.

Sun, 10/21/2012 - 10:25 | 2907603 virgilcaine
virgilcaine's picture

In context it was a micro bear mkt within a secular bull.  MSFT, ORCL CSCO and AAPL, AMGN, SBUX .. were born in those years. If we could eliminate the Toxic junk debt and allocate capital towards innovation and RD we'd be much better off.  Look where we are now, none of those early innovative co's are forming.. thank you FB, and the junk is levareged 100 X.. we are in deep.

Sun, 10/21/2012 - 09:52 | 2907584 Lost Wages
Lost Wages's picture

They should do a "Where Are They Now" with everyone who jumped out of a window on Wall St that day.

Sun, 10/21/2012 - 09:42 | 2907576 More_sellers_th...
More_sellers_than_buyers's picture

That is funny Bruce! I could hear the guy on the phones voice>>haha and you are correct, Bankers Trust was the one who pulled the plug.

 

Sun, 10/21/2012 - 08:52 | 2907542 Sathington Willougby
Sathington Willougby's picture

We got a hard sell on bad dollars, pretty much at gunpoint.  

The event has to be when the dollar priced goes from exponential to double exponential.  If you have a way around this I know some boys who'd like to hear it.  Actually, no one who can make a difference cares.  Not a fig.  It's just loot loot loot, that's all the pig men Congress wants.  They want their booty because they had to time serve in the shittiest party politics known in the animal kingdom.

 

Sun, 10/21/2012 - 08:21 | 2907517 LongSilverJohn
LongSilverJohn's picture

Let's say the CB's print enough money to buy all the bad assets off the banks balance sheet, enough equities to keep the market stable and each other's currencies to keep exchange rates stable (and perhaps shorting the paper PM market). If they don't lose their nerve and pull back at some point, why doesn't this work in terms of recapitalizing the whole world?

At one point we figured china could tank the bond market by dumping treasuries, then the fed stepped in to buy up as many as needed. We thought congress had to pass budgets and either tax or borrow to spend. Now the government just prints.

I sense intuitively that their plan is going to end in catastrophe, but am still having trouble squaring that last corner. If the fed loses their nerve in this experiment, I can see an immediate crash. But what if they just keep going?. Thoughts?

Sun, 10/21/2012 - 10:33 | 2907630 Vooter
Vooter's picture

Hyperinflation...

Mon, 10/22/2012 - 00:59 | 2908920 Maestro Maestro
Maestro Maestro's picture

If you're lucky...

Sun, 10/21/2012 - 07:03 | 2907492 dognamedabu
dognamedabu's picture

I never laughed so hard. Lol. Underlining that shit. So funny!!

Sun, 10/21/2012 - 04:12 | 2907452 CEOoftheSOFA
CEOoftheSOFA's picture

We (AT&T) also bet on Castro's death. We made a fiber optic cable that would run from West Palm Beach to Havana, to be installed after Castro's death.  It is still sitting in a tank in Baltimore.  AT&T doesn't even remember they have it.   

Sun, 10/21/2012 - 03:58 | 2907451 unirealist
unirealist's picture

Jeeze, after reading all the comments I gotta ask...

Is the whole ZH readership made up of ex-traders?

Mon, 10/22/2012 - 13:28 | 2909979 _Mr.L-HRecruit_
_Mr.L-HRecruit_'s picture

NO!   ;)

Sun, 10/21/2012 - 07:58 | 2907504 10044
10044's picture

you mean "smart people" ? what's your point dude?

Sun, 10/21/2012 - 21:03 | 2908639 WAMO556
WAMO556's picture

And ex shooters...too!

Mon, 10/22/2012 - 10:21 | 2909375 Alea Iactaest
Alea Iactaest's picture

Depends. Monday morning, yes. Saturday night, not so much. Read the comments and interpret accordingly.

Sun, 10/21/2012 - 02:47 | 2907424 Duke of Con Dao
Duke of Con Dao's picture

Bruce

you wrote: It was Bankers Trust that first pulled the plug on street liquidity. 

 funny that, I was the banking analyst at Salomon Bros in fixed income. if memory serves 

we didn't like that credit so well because they derived around 40% of their profit from 

trading operations. 

And yes, I also bandied about the term LDC... 

 

Sun, 10/21/2012 - 02:28 | 2907421 Pike Bishop
Pike Bishop's picture

"Finest Kind" recount BK. Great stuff. It's like a Nam story, except without bullets, and the bad fungus on my feet.

Sun, 10/21/2012 - 02:17 | 2907412 GMadScientist
GMadScientist's picture

Old school bookies put their shit on flash paper for a reason, BK. ;)

Sun, 10/21/2012 - 00:17 | 2907308 Kim Jong-Il
Kim Jong-Il's picture

Remember when margin on index options was something like 2% to 4%?

Those were the days yee hah!

Sat, 10/20/2012 - 23:18 | 2907256 Cosimo de Medici
Cosimo de Medici's picture

Liquidity, at least amongst actual market players, is as poor today as it was on 10-19.  Without the CB bid, there isn't much of a market.  JPM's whale learned that the hard way.  Large HFs can't create alpha because outside of APPL and a few other equities, there is no place to go where they are not the gorilla in the room.  Even the UST market is being distorted, and its spreads widening, as Bernanke absorbs the lion's share of 10+ paper.

Today we have hundred's of trillion in derivatives priced off either a manipulated rate (LIBOR) or what used to be the risk free instrument.  When the traditional risk free instrument has become, as Jim Grant says, rate free risk, then that few hundred trillion of derivatives cannot be accurately priced.  This is an advantage come bonus time, providing nobody has to liquidate.  If some degree of liquidation becomes necessary, however, Bruce Krasting, Jr. will have something to write 25 years on.

Sat, 10/20/2012 - 23:12 | 2907253 muppet_master
muppet_master's picture

in 1987

the casino tanked -9% the week before and the muppets stayed in the party for the crash the next week = freaking "geniuses" !!!

of course there were also other "geniuses" who bought as the casino tanked -2%, -5%...-9% BEFORE the ponzi scheme crash....and their answer?? "hindsight is 20-20" gee what a "surprise"

and they owned debt crap...because it was a "high dividend" paying treasury bond??? LOL !!!! (south american govs)....some freaking "geniuses" managing your retirement #s !!!! ROFLMAO !!!

Sat, 10/20/2012 - 22:32 | 2907224 Mediocritas
Mediocritas's picture

Very entertaining read, although it did cause an empathic trigger of stress sweat with its unique disgusting smell. Good thing nobody else is in the office here on a Sunday because I don't have a change of shirt.

I guess the difference today is that the Fedury / Treserve is always willing to put in a bid for the most worthless of paper....if you're asking as one of the Blessed that is.

Sat, 10/20/2012 - 22:24 | 2907215 the grateful un...
the grateful unemployed's picture

was reading doug nolands recollection of the 87 crash over at prudent bear. i recall GHW Bush going to the floor of the NYSE with a promise of liquidity. Both you and Noland attribute this to Greenspan, but it was unprecedented, and therefore belongs to the administration (Reagan). Noland says that in the current situation "policymakers have thrown in the towel.." but i think they are waving the towel. It is one hell of lot easier to cooridate the global economy now than it was in 87. the global economy is no longer the wild west.

the real question is with millions of third world people in desperate poverty, how much money will it take to make them middle class consumers, how much will they have to produce, and how little demand is there for the labor that provides that kind of wages? wall street prefers to think of the Bric economic situation as America in the 30s. [thats a big mistake]

but if the credit bubble anticipated this growth of monetary demand, what happens when traditional labor management tet a tet no longer provide the trickle down? remember the losses of 87 were compensated in ONE YEAR, and it was off to the races. if the buy the dip the next time it may be a longer wait.

Sat, 10/20/2012 - 22:07 | 2907206 Kprime
Kprime's picture

awesome story. Well written too. Loved it.

7Thank you.

P.S.  I am 55, I was in the market in 87, so I definitely can relate.

Sat, 10/20/2012 - 21:14 | 2907162 knukles
knukles's picture

Just think Bruce...
There ain't many of us left who remember '87 (that's 25 years ago, amigo) the Saturday Night Massacre, G William the Who, petro-dollar recycling, inflation flow-through, crowding out, a whole bevy of European FX.... 

Some where some body gonna figure that some of us old farts might be of some cultural memory value of sorts... for the same things are the only thing can be done, just wrapped in different bows and "I love you, Muppet cards"...

Been there, done that  :)

Sat, 10/20/2012 - 21:29 | 2907183 kliguy38
kliguy38's picture

I traded the 87 crash with all of the antique techniques present then.....I has 5 positions that resulted in a one day loss of 70% of my total portfolio......As Bruce said below their was NO real foching trigger that day on the street or news front. They didn't have their PPT then.......and the most likely the Fed's masters really pulled the trigger while not anticipating the full extent of the avalanche they would create......but make no mistat BT's call was probably part of a more coordinated effort to "cut"......as in "cut" the balls off the suckers and let um bleed. I remember a margin call casulty in Vail advertising his Ferrari for 20K the next day........and not sure what he finally got for it. 

Sat, 10/20/2012 - 22:11 | 2907209 reload
reload's picture

I was just getting going with my first decent sized book of European debt in 87 at a SCandknavian outfit in London . My boss at the time traded the USD book and had been around Long enough to sense trouble and trust his instincts to have the hatches battened down. We did very well in the aftermath.

A couple of guys down the desk did bits and pieces in LCD but if was far from mainstream as you say.

Bruce-odds are you must have known QA....???

 

 

 

Sun, 10/21/2012 - 00:33 | 2907334 Bruce Krasting
Bruce Krasting's picture

I'm struggling with this. What is QA?

Sun, 10/21/2012 - 03:07 | 2907434 reload
reload's picture

QA. Was a person, so my guess was off. Very colourful character. A brt who worked in Ldn & NY . He set up the ICAP LCD broking IDB - but probably in 1989 I think, at 'Brady bond' time anyway. Unforgettable character, mostly in a good way. Sadly died some time ago climbing mount Kilamangiro.

 

 

 

 

 

Sat, 10/20/2012 - 20:20 | 2907121 Tango in the Blight
Tango in the Blight's picture

Fidel will probably still be alive in 2027 causing the next great market crash due to rumors of his demise. The old bastard will beat capitalism at its own game once more.

Sat, 10/20/2012 - 19:45 | 2907070 maxwell2121
maxwell2121's picture

Tell me again, why can't we just let this crash and burn? 

Sun, 10/21/2012 - 02:18 | 2907413 GMadScientist
GMadScientist's picture

I believe the definition of 'we' is a stumbling block.

Sat, 10/20/2012 - 19:07 | 2907025 Fix It Again Timmy
Fix It Again Timmy's picture

The Titanic is unsinkable, the markets are stable, secure and will continue upwards....what's to worry?

Sat, 10/20/2012 - 18:10 | 2906931 duckhook
duckhook's picture

As an option floor trader for my own account ,I saw   put buyers for   at least 2 weeks and probably longer before the crash.I had on a bunch of way in the money reverse conversions.By the end  of the  day they were still way in the money ,but the puts prices  were so out of whack that these reverse conversions were3/4 -1 point out of whack ,when 1/4 point was a lot.I lost  over 1/2 million that  day..That Monday put buyers were paying unbelievable prices .if i remember correctly the dow (xmi puts) were implying a %50 down move within a month.Normally i would go home  hedged with under 5000 deltas.that day i ended up long 50,000 deltas and  was kind of nervous going home.Next morning i am on the 515 am train when normally i am on the 715 am train.I sit next to  the head of margin  at Solomon Brotheers.he told me that Salomon had over 2 billion of margin calls alone.I could not eat breakfast or even drink coffee.thought i was looking at another day like Monday.they could not open my stock becaus of a huge imbalance of  sell orders. Around 1100.there was some type of news that came out of Washington.Insteadof an inbalance of seller ther were big  buyers .i sold out my 50000 deltas  up 3 points and went short 10,000.For the rest of the day i sold puts at unbeleivable prices ,so unbelivable that i turned a 150000 profit on the opening to a 50000 loss on the day.so for exchanges  2 days i was down almost 600,000 and i was basically an option hedger.As i remember the instituted 1/2 days for the rest of the week.The extreme frentic activity subsided and put prices started coming in b ig time  .By the end of the week i had made net 250000.If i had any guts I  could have made 5 million within a month.

This is going to happen again .i do not know what is going to cause  this,but it is inevitable that there is going to be another major crash and it would not  surpruse me if it happened sooner rather than later.At the time i also was long a small postion of long 20 treasury bonds.on which i seemed to losing every day.I waited for about 4 or 5 days after the crash and sold my bonds at a small profit,That was a mistake as  they kept on going up and up and up.

Mon, 10/22/2012 - 13:35 | 2910010 _Mr.L-HRecruit_
_Mr.L-HRecruit_'s picture

How would someone stuck in a POS 401A try and out-manuever the coming crash? THAT is the question! No Typo, that is a 401A

Sat, 10/20/2012 - 23:04 | 2907248 Cosimo de Medici
Cosimo de Medici's picture

In the two weeks prior to 10-19, index puts jumped by a factor of 1000x.  What was sold for $25K on the 5th sold for $25 million on the 19th and the morning of the 20th.

Sat, 10/20/2012 - 18:41 | 2906987 Everybodys All ...
Everybodys All American's picture

Do you still trade duck? If you do are you net short or net long right now?

Sun, 10/21/2012 - 18:38 | 2908423 duckhook
duckhook's picture

As an option hedger i was always looking for pricing discrepancies .The vig has for

 the most part  gone out of options.It is unusual where you can find a trade that has a real mathematical advantage,but that did happen in 2008-2009.Curently I am not trading much.mainly GLD and starting  to build up a short position in Treasury bond..Back in 1987 I was long bonds when rates were at 9% ,deficits were much less as a % of GDP and  yet I was losing money up until a few days after the crash.Now rates are below %3 ,  are negative in real terms through the 20 year maturity  deficits are much,much worse  and i am short and losing a little bit.There is vig in this trade and I will commit more as rates move lower.

Central banks are forcing investors  toward riskie and riskier r trades.But riskier trades ,by definiion come with more risk.Maybe things are looking rosy for many investors now  ,but there will inevitably be problems in the future .Just look at history .Investors   have  given up years of gains  plus much more in very short periods of time.Throughout 1987 we joked that 1987 was going to end up with 240 up days and 10 down days and be down on the year.Ironically  we were not that far off.

The problem with current  conditions is the extreme complacency that the Fed is going to save your butt,but the conditions that are driving problems now are to a great extent, sovereign and state debt.There will come a time when people are going to wake to the fact that liquidity injections are useful for short term panics ,but can by thermselves cause panic in currencies and  bonds and then the liquidity injections will have an effect opposite to their intentions and  lead to a global margin call.

Trading has  always been  a game where it is not easy to predict the future .the trick is makes sure that you well enough capitlized that you can withstahd the inevitable drawdowns ,so that you can participate when there is vig in  particular trade

As an addedum to my 1987 description ,i remember one trader in particular.he was known as a huge and smart option seller and had made millions and millions over the 8 years that i dealt with him.On that one day in 1987 ,rumors were that he lost over 25 million and i never saw him again.

Sun, 10/21/2012 - 20:37 | 2908606 Everybodys All ...
Everybodys All American's picture

I appreciate your response.

As an addendum to my 1987 description ,i remember one trader in particular.he was known as a huge and smart option seller and had made millions and millions over the 8 years that i dealt with him.On that one day in 1987 ,rumors were that he lost over 25 million and i never saw him again.

I believe history will repeat itself and I imagine those option sellers get a little more nervous every day. We all know this is unsustainable. I've learned as you have that taking short positions can pay off but you better be prepared to take a little heat for an extended period. I wondered if you use any leverage with your short positions on US Treasuries or if maybe your just doing this through options.

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