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QuoteOriginally posted by: LongThetaQuoteOriginally posted by: AlphabetOf course, I think corporates shouldn't hedge at all Why do you say that?I think he appealing to the MM theorem.

QuoteOriginally posted by: LongThetaQuoteOriginally posted by: AlphabetOf course, I think corporates shouldn't hedge at all Why do you say that?It's a finance 101 idea that corporates should concentrate on transparent disclosure of risks and leave hedging to their shareholders.

The future is uncertain, spreads are certain is the core thesis. The argument that corporates should cleave to what they're good at is attractive in a modern finance world, where you want to add marginal exposure in as discrete a way as possible. (If I add Dell to my portfolio, it's because I have a view on or need diversity through the PC industry, and I don't want exposure to the dollar or interest rates or the price of memory). But is hedging cleaving to what you're good at? In the real world corporates tend to be bad at taking hedging advice, and so they hedge inefficiently and patchily. I saw a M&A deal hedge handled so badly once that the whole deal was made 20% more expensive to the buyer, all because the head of treasury there was too dumb or insecure to choose a simple hedge. I mean, a good trader/structurer is going to be in a bank.Over the long term, macro variables should balance out, and over a large population of positions, I can get diversity without paying 3% to the banking sector.I think the behavioural finance idea of loss-aversion being more motivating than profit-seeking explains the prediliction corporates have for hedging, together with the ownership issue (it's easier to defend hedging than a loss that could have been hedged). (I was typing while Johnny summed it up more concisely...sorry. And Nonius, if I could have spelled MM I would have mentioned it, I never thought of abbreviating)

QuoteOriginally posted by: opmtraderBeavis, if you are being serious, congratulations.What do you trade in general to make such a handsome sum?I didn't say I was "anticipating receiving" said sum, I merely said I "plan on making." ...As in, sometime in the future.

From speaking with some of the guys on the structured side is they are very smart, most have at least a masters but above all they are very good with clients. Structuring requires both the skill of a quant trader and the persona of a broker.

Any details on the trades/core strategies this guy put on?

QuoteOriginally posted by: rynoAny details on the trades/core strategies this guy put on?Details are slowly emerging. There are whispers that was short the US dollar and long the Euro. It's not a trade that anyone could have thought of. Highly proprietory.

QuoteOriginally posted by: LongThetaQuoteOriginally posted by: rynoAny details on the trades/core strategies this guy put on?Details are slowly emerging. There are whispers that was short the US dollar and long the Euro. It's not a trade that anyone could have thought of. Highly proprietory.Regardless, he can be as smart as he wants. I doubt he is much smarter than most on the forum, er, the forum a year ago. Fact is that he is LUCKY. Short the dollar? Might as well be punting pork bellies. He is lucky.

How are bonuses taxed in GB? If he netted 30 mil, he probably grossed about double.