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<DIV><FONT size=2>I don't know who or what the alleged "Big Boys" would be, but
there is a very interesting article in Futures magazine concerning the
Commitment of Traders report. It breaks down the net P/L for Commercial,
large spec, and small spec in the 1990's for Cotton and the JY. I would
assume that when one spoke of a "Big Boy" a commercial, whether it be Allenberg
or Dunnavant Cotton Companies or a major international bank trading Yen, would
be at least part of that conspiratorial "Big Boys" group. Large
speculators are mainly CTA's, hedge funds and other professional money
management groups. Many of the large specs are far from secret, as they
must register with various government agencies. Regardless, I would call
these commercial traders, particularly as a group, "Big Boys" and insiders as
much as anyone. This is what the commercials did in the 90's in Cotton and
the JY. You can check my facts on page 46 of the April 2000 Futures
magazine.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Cotton</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Commercial users $(430,040,000)</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Commercial producers $(244,772,000)</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Large speculators $710,317,000</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Small traders $(35,506,000)</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Basically, Commercials lost $675 million during the
90's. Pretty inefficient manipulation in my book. All of that was
lost to large speculators, who I would guess the majority are registered money
managers. By the way once you control a position of a certain size, you
have to register with the CFTC as a large trader. Any conspiracy would
have to therefore include the CFTC.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>The banks, brokerages, and multi-nationals did no better
trading the JY.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Commercial useres $(2,151,609,000)</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Commercial producers $(2,766,093,000)</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Large specs $3,081,803,000</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Small specs $1,835,900,000</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>While some of those losses may be 'hedges', I brokered trades
for commercials for 6 years, and I would guess that MAYBE 5% of the trades were
pure hedges. They hedged when they thought the market was going against
their cash position and took it off when they thought their cash position would
profit. Perhaps others have had different experience with commercial
traders.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Lastly, the floor myth. The failure rate for floor
traders is roughly the same as off the floor. This is remarkable because
floor traders have the built in edge of the bid/ask spread while the off the
floor trader must overcome that edge. That means that floor traders must
trade much worse than an off the floor trader to lose. Many floor traders
make millions trading. They think it is because of whatever they do to
predict the market, manipulate the market, or whatever. (Some FT's have
had winning systems or methods. This example goes for the
majority.) However, upon close examination, one sees that they trade
1,000's of contracts a day, and that they buy on the bid and sell on the
offer. Even in a tight market like the Bonds, that advantage is
large. Just buying the bid and selling the offer with a spread of one tic
makes one $31,250 per day trading 1000 lots per day. There are about 250
trading days in a year making me $7,812,500 per year. Wow, I really called
that market well. I really manipulated that market. I can make $1
million on 128 lots per day. Even with that advantage, the majority of
FT's fail.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>The floor takes money from the public, not because the public
is dumb, nor do they manipulate the prices (even though many of the smartest
think that they do). They take the money through the bid/ask
spread.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>sb</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A href="mailto:t-bondtrader@xxxxxxxxxxxxx";
title=t-bondtrader@xxxxxxxxxxxxx>T-Bondtrader</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Thursday, April 06, 2000 6:45
AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [RT] Manipulation...</DIV>
<DIV><BR></DIV>
<DIV><FONT face=Arial size=2>When I was shown around the CBOT and CME by a
member, I was told, while walking through the pits and in the midst of all the
action that the general consensus of the floor was that it was simply "taking
money from the public". The best way of viewing what was going on
was to think of it as a game. The Big Boys (a term I use to cover
a multitude of market makers and movers!) who control everything, could only
make money when the market moves, so they make it move. They take
it up and they take it down. And they make exceptionally good money when
they do it. They are the guys who see both sides of what is going
on, as it happens. Consequently, the small illiquid pits are very loaded
against the public (it is just too easy!) and should be avoided at all costs,
but the big ones could be played as they played them, if, despite the size of
your account, you actually played according to their rules.
</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Now you have to understand how they move the
market, how they play their game and then play it their way. You have to
put your little pads in their big footprints. It is not
point, for example, saying I use a stop of X ticks according to my wallet,
when what you need to do is use a stop of Y ticks or Z ticks according to
where the market is and where it is going. You not only need to be in the
market when the Big Boys dealing the cards, but you need to be out of the
market when they are not there, too. You can hide quite a sizeable
number of contracts in the bonds that you couldn't possibly do many other
markets. You can get your price going in and coming out, if you
trade the way the market moves and not the way you want it to move. You
may be a Little Boy, but you need to behave like a Big Boy and you can only do
that in a very liquid market that you can afford to be in, in terms of size,
range, volatility, spread, etc, etc. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Of course, the markets are manipulated by the Big
Boys and in that term are a whole host of faceless types, which means a lot
more than just the government or the fed or any other agency. Whether
you like it or not, they do what they do when they want to and that's
that! Some clever people, using all sorts of predictive tools, may
be able to say when they are going to do whatever they are going to do -
and if you can do that, more power to your elbow. If you can't
(for any one of a host of reasons), then all you can do is be in a position to
profit from what they do, when they are actually doing it.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>I am quite sure that there are some immensely
powerful people around, who can club together at the right time to do what
they want to do in the markets. Trading is, after all, the biggest
endeavour that man does on this planet. It is not so much a conspiracy,
as a fact of life. It is being powerful. For many, many people
that is what life is all about. Since the vast majority are the
subjects of the powerful (not withstanding democracy!) the best thing to do is
find out it works and then gain from flowing along with the power, rather than
battle against it. But, you may say, that cannot be done in many spheres
of life, and I am sure there are many examples where this is right - but it
can be done in the markets, if you apply yourself. You can do as they
do, if the market is big enough and that's about the size of it...
</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Bill Eykyn<BR><A
href="http://www.t-bondtrader.com";>www.t-bondtrader.com</A><BR>"Learn to read
the tape"</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Thu Apr 06 07:36:36 2000
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Date: Thu, 06 Apr 2000 16:25:19 +0200
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Subject: (BN ) Saudi Prince Alwaleed Buys $1 Bln of AOL, Compaq, Kod
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Saudi Prince Alwaleed Buys $1 Bln of AOL, Compaq, Kodak, Xerox
4/6/0 9:7 (New York)
Saudi Prince Alwaleed Buys $1 Bln of AOL, Compaq, Kodak, Xerox
Riyadh, Saudi Arabia, April 6 (Bloomberg) -- Prince Alwaleed
Bin Talal, the billionaire Saudi investor, went on a $1 billion
buying spree as Internet and computer company shares slumped,
snapping up shares of America Online Inc. Compaq Computer Corp.,
Eastman Kodak Co. and Xerox Corp.
``The correction was one of those historic moments to
seize,'' Alwaleed said in a statement. ``We have been closely
tracking the performance of some of these stocks for about two
years awaiting the right target price.''
Through a family trust, Alwaleed bought $400 million of AOL,
the world's largest Internet service, bringing to $1.05 billion
the stake under his control. AOL is down 17 percent this year.
He also added $400 million of shares in Compaq, the biggest
maker of personal computers, down 15 percent since Jan. 24. He
bought $100 million of stock each in Kodak, the world's biggest
photography company, and Xerox, the world's No. 1 copier maker.
The Nasdaq Composite Index, laden with computer-related
shares, is down 17 percent from its high reached last month.
Alwaleed, a nephew of Saudi Arabia's King Fahd, is the
biggest individual shareholder of Citigroup Inc. and also holds
major stakes in companies such as Apple Computer Inc. and News
Corp.
--Vernon Silver in the New York newsroom (212) 893-3037/jdh
Story illustration: CPQ US <Equity> GIP for a graph of Compaq's
intra-day stock performance.
Company news:
CPQ US <Equity> CN
AOL US <Equity>
XRX US <Equity>
EK US <Equity>
NI Codes:
NI CPR
NI TEC
NI COS
NI TMN
NI TX
NI US
NI SAUDI
NI MIDEAST
-0- (BN ) Apr/06/2000 9:07
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