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That makes no sense. That is exactly the same thing as then selling puts the next month.

Other than the interest rate issue (which is not much of a real consideration) a covered call is exactly the same as a naked put. It is absolutely not less risky.

These are pretty ridiculous claims. No offense, it's obvious you are not in the industry... I'd be surprised if GS has any serious client loss. No one really cares if 7/10 Americans think Goldman committed fraud, probably something like 9.5/10 Americans don't even understand the issues...

I don't think it would really change too much. It's not like one person purchasing all of the shares changes the demand for those shares.

Delta depends on time, vol and (to a lesser extent) interest rates.

What do you mean bring the stock back up to $50?

Goldman losing 70% of their IB revenue?? Where are you pulling this number from?

You're not understanding what I'm saying... as a market maker you charge a premium in vol terms in the big ask for sensitive contracts. Also I work as a MM... so I think you misunderstood where I was coming from haha.

Before big announcements you'll see bid/ask widen substantially (or perhaps temporarily disappear) and market makers will often charge a large premium in terms of implied vol.

There are a lot of factors that go into this. First, it depends on whether it's a GSE MBS or Private Label MBS GSE MBS are guaranteed by Freddie, Fannie & Ginnie. Almost always 15 or 30 year fixed mortgages. Simplest example are typical Passthru securities. Since they are guaranteed by the...

Seriously, go buy Hull or Natenberg, you will be much better off with that kind of background knowledge.

I wasn't speaking to you specifically, just in general. I'm not bashing anyone, these products are not easy to understand for a lot of people in finance, let alone those outside. On that note, it was clear the Senate panel (minus maybe 2-3 members), even after hours of discussions, still did not...

Agreed... this isn't even a complicated structure. If you've perused any options book like Hull at the very least you should be able to use excel to construct a total position PNL... or even know what it looks like.

Alright I think there is a fundamental misunderstanding about the products involved in this case... please read this before you blame Goldman for "taking the opposite side." Synthetic CDOs were created to replicate the payment structure of a CDO. Why was this done? Too much demand for MBS and...

A protective put is when you are long underlying and buy a put. It is a synthetic long call.

Low risk??? What the heck are you talking about. Think about it. Long stock: Makes money with increase in price, loses money with decrease in price Short Put: You collect premium and have to pay max{0,difference of strike and maturity closing price} All you are doing is shifting your...

That's not really common for traders at most BBs... I don't know if it's different at GS or what, but either way it strikes me as a pretty large exaggeration. As someone noted, that might also take into account IBD, in which almost all leave the firm after 2-3 years. It is common to stick...

It's more common for them to hire recent graduates due to the ease of on campus recruiting. It is not impossible to get in other ways, however it often is through serious networking. Grades and ECs are the major things that will help get an interview, it is pretty important to go to a target...

As mentioned, if you are looking to get onto a derivatives desk in particular, they like to see quantitative background. Not necessarily because you are going to be solving PDEs on the job (if you're a trader at a BB you most certainly will not) but because it shows numerical and analytical...

Full time MBA's are usually 2 year programs. MBA is good to transition into a BB in S&T, not as good for Prop funds. No idea about online degrees, but never heard of anyone on WS with one.