Word: stockings
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Dates: during 1980-1989
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...news from Tokyo buoys Wall Street, as do the Fed's reassurances of the previous day on the availability of credit. Major corporations take advantage of greatly discounted prices to buy back large blocks of their own stock. Other bargain hunters also begin to prowl. One broker says the market is moving "from hell to heaven...
After some swings, London joins the uptick. A Monday-Tuesday loss of $155 billion in stock values is dented by a hefty $48 billion recovery. The one-day stock-exchange index leaps 142.2 points, to 1943.8, a record increase...
...much are the computers to blame? That issue stirs a great deal of confusion. The term program trading is misleading: it derives not from the fact that trades are executed by computer programs but that they involve the systematic sale of portfolios of stocks as if they were one stock. The first program trades, executed in the early 1970s, did not involve computers...
Program trading came into its own in 1982, with the advent of stock-index futures. These enable investors to make a bet on which way the entire market is going. Index futures, used with program trades in the stocks on the index, open up a variety of opportunities. One of the most popular takes advantage of momentary differences between the price of a futures contract and of the stocks themselves. When this spread is sufficiently wide, a trader can lock in a profit at no risk by, say, buying the futures and selling the underlying stocks. This practice, called index...
...most arbitragers were on the sidelines last Monday because the computers that track prices had fallen hopelessly behind. The real culprit was a variation of program trading called portfolio insurance. This is a defensive strategy designed to protect stock portfolios against market downturns. Rather than sell stocks as their prices are falling, portfolio insurers sell stock- index futures. If the decline persists, the futures can be repurchased at a lower level, yielding a substantial profit that will offset some of the loss sustained on the stocks. But traders who buy the futures hedge their positions by making computer-aided sales...