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In the old methodology In the new methodology The only change in the formula is from: Month x = Month (x- 1 year) + lookup on year on year table to Month x = Month (x- 1 year) + lookup on year on year table + lookup on month premium table The seasonality premiums will change over time and I will let you know when I cha...
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call me when you get this
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i am free to talk this afternoon if you want
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Please approve.
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Andy: This past weekend we released a new version of the EOL software that, unfortunately, had a bug.
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The effect was to lengthen the time delay between numbers changing and when they would show up on the internet to an unacceptable level that increased the number of failed trades.
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We made the decision to take some of the more volatile products temporarily offline until the fix could be made.
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I do not anticipate this to be a concern going forward.
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Thanks for the feedback.
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John Arnold
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Please approve Larry May for a trader id on EOL for "pipe options" book for US gas.
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Thanks, John
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Hello...
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Despite my thoughts, you like baseball.
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So the question is do you like art (as in musuems) ?
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I'm leaning towards yes but don't know for sure.
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2 options: Either we leave from work and you watch me get a haircut for 20 minutes or...
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I pick you up around 6:30...
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are you sure...have you ever been to bon coupe before don't knock it till tou try it
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Hey: Any good set of 4 available for Sunday's game
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nope...your loss though
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call me if you're in town this weeekend
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Dutch: The increase in position and subsequent position limit violation was due to two factors.
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First, a long position was moved into the long-term exotics book due to the nature of the position.
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I am currently using the ltx to hold longer-term strategic positions.
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The large increase in position is a reflection of my view of the market.
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Second, a large customer transaction originated by Fred Lagrasta's group was transacted at the end of the day Monday and was not able to be hedged until this morning.
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Hence a large position increase occurred for yesterday's position and a corresponding decrease occurred today.
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John
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Thanks for taking me in last night.
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Sorry about being drunk and stinky.
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My cab, that we called at 6:10, showed up at 7:02.
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I was so pissed.
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Andy: Just a couple of quick items that need to be addressed.
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First, what happens if the delta of the option is greater than the size of the hedge offered on EOL?
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Second, what strike are straddles traded at.
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Are they set at the nearest 5 cent interval or are they mid-market of the EOL quote?
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Andy: The problem if we limit the size on options to being what size is offered on the swap hedge, we will not be able to offer adequate size on the options.
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Optimally, I think we want to offer a minimum size of 100 across all strikes.
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If the swap is 4/4.5, one a day up, and someone buys half a day, making the market, 4/4.5 one a day by half a day, the size offered on a 10 cent out of the money call might be as low as 30 contracts, a much smaller size than most people want to trade.
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If we restrict to strikes with a lower delta, we face the problem of not offering enough strikes and not making a market in options that have open EOL interest that have moved closer to the money.
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Maybe the answer is to assume the swap hedge to be a penny wide two way wrapped around the EOL swap mid market.
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Thus if the front swap on EOL is 4/4.5 one a day by half a day, the input into the option calculator is 3.75/4.75, 100 up.
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In this case I think 100 is necessary because once a strike has open interest, we must continue to support it.
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Thus I anticipate having to make markets in deep itm options as the market moves.
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In terms of straddle strikes, I think the edge received from buying straddles struck on the EOL offer and vice-versa is not big enough to compensate for what I think the industry will view as a scam and another way Enron is trying to rip people off.
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Although striking on the mid-market is probably easier for the trader, I actually think striking in five cent increments makes more sense.
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It allows people to trade out of the position on EOL.
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Whereas if someone buys the 3085 straddle and the market moves to 3200, they have to call ENE to close the trade.
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If the trade is struck at 3100, we will have a market on both the 3100 call and put at all times.
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Secondly, I would anticipate non-volatility driven option traders may elect to sell either just the put or call in this scenario depending on their view of market direction.
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Jeff: Sorry for my cryptic answer in regards to the LNG deal on Friday; I was a bit confused by the question.
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In terms of the gas pricing, this is a deal that should be done.
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Market conditions are very conducive to hedging a fair amount of the gas.
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Obviously, a deal this size would require Enron to wear a considerable amount of the risk in the short term, but the risk-reward of the position looks very favorable.
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I am certainly willing to sign off on this deal around the $3.00 level.
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John
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Please stop sending emails to jennifer_arnold to the following email address: You have the wrong person
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Hey, I just got your email.
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Call anytime after 4:00.
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Obviously, I don't read my email very often
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Doug: To confirm the pricing of the LNG dela:: I can show a $3.01 bid for the Nymex portion of 160,000 mmbtu/day for the time period Jan 2003-Dec 2014.
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The bid on Henry Hub basis for same time period is -$.0025 resulting in fix price of $3.0075; the bid on Sonat basis is -$.0175 translating into a bid of $2.9925.
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Notional volume = 70,128 contracts.
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PV volume = 37,658 contracts.
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Exposure per $.01 move = $3,760,000 John
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Please take me off your mailing list
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Kevin: Come by Tuesday between 5:00-5:30 if you still want to see the new spreadsheet.
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However, it may be more valuable to talk to Dutch Quigley, who runs my risk, as he built the system and understands the vertical integration better.
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John
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Please do not send these emails anymore.
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I am not Jennifer Arnold
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Stupid taxes
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Let's meet at 4:00.
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Can we meet at 5:00 today?
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Please use this vol curve for a dry run to figure out var for my book, NG price, and Jim's book, Storage, and communicate the results.
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Thanks,John
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Tanya: On Friday I emailed a new vol curve to use for VAR testing.
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I was under the impression that you could apply this vol curve to the price book and storage book and have a new experimental VAR number by Monday.
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I have not received any response.
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Please reply with status of this project.
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John
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Tickets requisitioned for England/Germany.
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$1500!!!!!!
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In preparation for our discussion tomorrow, can you run VAR numbers for some 6.
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+1000 July Chicago Basis -1000 July Michcon Basis 7.
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+1000 July Henry Hub Index 8.
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+1000 July 2003 Chicago Basis Again, these are separate portfolios.
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I'm trying to check that the VAR numbers make logical sense.
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Thanks, John
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yes
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Can I add 3 more portfolios: 1.
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+1000 July 2003 Chicago Basis - 1000 July 2003 Panhandle Basis 2.
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+1000 June Henry Hub Cash 3.
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+1000 June Henry Hub Cash - 1000 July Futures Thanks, John
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Thank you very,very much.
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Love you, John
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Hey Liz, Thanks for letting me use the phone.
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A real life-saver.
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My brother had a Nokia world phone on the trip and it seemed to work better.
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