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Wholegrain Posted 17 years ago
Grammar
Did I understand this correctly?
What this means is that the dealers who sold the mining companies these calls, actually purchased the calls from the miners as a principal, rather than just facilitating the transaction as a broker.
What this means is that the dealers who persuaded the mining companies to buy these calls, actually purchased the calls from the miners as a principal, rather than just facilitating the transaction as a broker.
http://74.125.113.132/search?q=cache:pzbkW1lracwJ:www.gold-eagle.com/gold_digest_99/butler112299.html+hedger+forwards+gold+manipulation+leasing&hl=en&ct=clnk&cd=6&gl=ca
full extract
For the companies on which we have details (excluding Barrick), we see another similarity in their options program. All three bought various short dated put options with the proceeds of the long dated call options sales. (When you buy an option you pay the premium, a sale results in the seller getting the premium). So here we have four separate and distinct companies selling aggressively long dated call options. At least three, and maybe the fourth, bought put options with the proceeds, with an undesirable maturity mismatch - the limited liability purchases expire before the unlimited liability sales expire. Also, due to the long term nature of the calls, we can safely conclude that these are OTC (over the counter) options as distinguished from exchange traded, clearinghouse guaranteed options (like the kind traded on the COMEX). What this means is that the dealers who sold the mining companies these calls, actually purchased the calls from the miners as a principal, rather than just facilitating the transaction as a broker. (We can't tell if the dealers were acting for an in-house proprietary account or a favored client, but the safe bet is the dealers own what was sold to the miners). We can say this about OTC options - they are generally customized and because they are not openly traded are therefore nowhere near as liquid as the exchange traded variety.
What this means is that the dealers who persuaded the mining companies to buy these calls, actually purchased the calls from the miners as a principal, rather than just facilitating the transaction as a broker.
http://74.125.113.132/search?q=cache:pzbkW1lracwJ:www.gold-eagle.com/gold_digest_99/butler112299.html+hedger+forwards+gold+manipulation+leasing&hl=en&ct=clnk&cd=6&gl=ca
full extract
For the companies on which we have details (excluding Barrick), we see another similarity in their options program. All three bought various short dated put options with the proceeds of the long dated call options sales. (When you buy an option you pay the premium, a sale results in the seller getting the premium). So here we have four separate and distinct companies selling aggressively long dated call options. At least three, and maybe the fourth, bought put options with the proceeds, with an undesirable maturity mismatch - the limited liability purchases expire before the unlimited liability sales expire. Also, due to the long term nature of the calls, we can safely conclude that these are OTC (over the counter) options as distinguished from exchange traded, clearinghouse guaranteed options (like the kind traded on the COMEX). What this means is that the dealers who sold the mining companies these calls, actually purchased the calls from the miners as a principal, rather than just facilitating the transaction as a broker. (We can't tell if the dealers were acting for an in-house proprietary account or a favored client, but the safe bet is the dealers own what was sold to the miners). We can say this about OTC options - they are generally customized and because they are not openly traded are therefore nowhere near as liquid as the exchange traded variety.
Top answer
I read it as your first option. As the deal seems to have been consumated, it means this at least. No salesman or dealer would be worth his salt if there were not some persuasion involved.
- I read it as your first option.
- As the deal seems to have been consumated, it means this at least.
- No salesman or dealer would be worth his salt if there were not some persuasion involved.
- I'm not reading it as meaning to imply that the tactics were unusually coercive.
- Maybe I'm missing something.
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6 Answers
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I read it as your first option. As the deal seems to have been consumated, it means this at least. No salesman or dealer would be worth his salt if there were not some persuasion involved. I'm not reading it as meaning to imply that the tactics were unusually coercive.
Maybe I'm missing something. I don't pretend to understand this deal. It would take more research than I'm prepared
Maybe I'm missing something. I don't pretend to understand this deal. It would take more research than I'm prepared
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Thank you.
Well, thinking of it, I think you are right, but there is a distinction to be made.
When he says sell short he probably didnt mean that they went short, because you can't possibly go short and long on a call option, well on the same call option. Therefore, because of "broker", I think you are right, he meant sold as in "bought it for them and sold it to them" and then
Well, thinking of it, I think you are right, but there is a distinction to be made.
When he says sell short he probably didnt mean that they went short, because you can't possibly go short and long on a call option, well on the same call option. Therefore, because of "broker", I think you are right, he meant sold as in "bought it for them and sold it to them" and then
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So you see "the miners" and "the mining companies" as the same identical parties? I guess brokering a deal between Tom Jones and himself would of necessity involve a bit of flim-flam.
Frankly, I'd be missing some of the essentials of this deal, even if it were on the up and up. You're way ahead of me on this stuff.
But I don't think the sentence about sell
Frankly, I'd be missing some of the essentials of this deal, even if it were on the up and up. You're way ahead of me on this stuff.
But I don't think the sentence about sell
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Well, the author doesn't make any mention of miners in his text and only mining companies. I presume only one side of the transaction is described. The miners would have to be the ones who work in the mines, I doubt many of them hold call options.
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<< the dealers who sold the mining companies these calls, actually purchased the calls from the miners>>
So you're saying this means the dealers bought the calls from a group of people and sold them back to that same group of people. Yes, I've known operators who turned a nice profit by doing that sort of thing. (It makes ya mad to be on the receiving end of it.)
So you're saying this means the dealers bought the calls from a group of people and sold them back to that same group of people. Yes, I've known operators who turned a nice profit by doing that sort of thing. (It makes ya mad to be on the receiving end of it.)
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From my understanding, the dealers duped the mining companies into bad investment practices. Thinking of it, I think sold meant persuaded again. OTC CALL OPTIONS cannot be traded as exchange based CALL OPTIONS; therefore the mining companies cannot transfer their burden to another party; this means you cannot trade or "sell" your CALL OPTION to someone, you can only write it yourself and sell or
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