Monday, January 29, 2007

Bulls Make Money, Bears Make Money
But Pigs Become Sausages


Back in the days when I used to write a daily market commentary for professional traders and dealers, I often did it in verse. So here goes once again, for old times' sake...

To be sung to the tune of "Who's Afraid of The Big Bad Wolf?"


Who's afraid of the Big Bad Drop
Big Bad Drop, Big Bad Drop ?
Who's gonna pay when it Stop?
Tra la la la la

We now are full of bloated pigs
Big and stuff-ed piggy-wigs
For the big, bad very big very bad drop
They don't give three figs.

One of them was too fond of loot
And so he sold one giant put.
As he sails in his yachts
With his brokers he so chats
He snickers, "hoot, my man, all risk is moot".

The other one keeps selling out vol
So sure he is it never will a-call.
As he smirks with a giggle
His options he so wiggle.
While it lasts, he's having a ball.

Ah, but the last one is smart
With his stash he won't part.
He has no position
In all that is fiction.
'Cause profit is not shown by a dart.

Ha ha ha! How the other two laugh
How they just wink and laugh ha ha!

Came the day when markets did frown
And correction brought risk into town.
With a swoon and a dive it raised all fears
And brought the piggy put crashing down.

Oh, and how fast volatility appeared
Where none was before afeared.
Strangles and spreads crumble and soar
Unlike anyone knew before -
And piggy vol is ruined forever.

No one left but number Three
To save the piglet family.
But this is not a funny cartoon,
There is no bailing for One and Two,
As Three cries: "Let them eat doom!"

Oh! But.....(for now)...

Who's afraid of the Big Bad Drop
Big Bad Drop, Big Bad Drop ?
Who's gonna pay when it Stop?
Tra la la la la.



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