The former optionstrader, writer and Guru Nassim Taleb, wants US banks to be nationalised, treating them as utility companies. He wants any risktaking entities to be separated and run privately with a clear directive never to be bailed out. This to prevent any profits from being paid out as bonuses during goodtimes only to be bailed out during crises.
He also wants a ban on CDS trading in order to prevent sovereign speculation. When it comes to options and derivatives he wants a decomplexation of the product, leaving only vanilla options to be allowed in order to make the risk more comprehensive and transparent for boards and regulators, since they seem not to understand the product.
I agree, they dont. Many managers at lower levels dont seem to understand it either.
Suggestion; only allow institutions where management properly understands the product to be allowed to riskmanage it. Otherwise not.
Criteria; Only accept business area heads at board level with hands on trading experience for x amount of years with proper trading and management exposure to sizeable options/derivative portfolios in order to get the indepth know how.
Wouldnt leave many institutions allowed to manage options risk without shifting out management, prompting CHANGE.
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment