I have money in silver, cash, and preps, and as of yesterday I was all set to place a small amount of money in put options on U.S. and foreign stock markets. (As we know, put options allow you to profit as markets go down.) Suddenly, I found myself hesitating because of the upcoming dreaded GPS rollover. GN talks about data corruption from noncompliant sources. Foreign stock markets, for example, may not have corrected their GPS problems and I suppose there's a chance that worldwide transactions could be messed up? Agree? Disagree? This GPS thing is such a wild card. Sigh. Any knowledgeable opinions? Thank you.

-- Susan (first@name.only), August 09, 1999

Answers

Vielleicht.

-- Randolph (dinosaur@williams-net.com), August 09, 1999.

[Fair Use: For Educational/Research Purposes Only]

http://www.flatoday.com/space/today/080999a.htm

Aug. 9, 1999

Global Positioning System calendar faces rollover

Air Force Materiel Command Year 2000 Program Office News Release

WRIGHT-PATTERSON AIR FORCE BASE, Ohio - Engineers working on the Year 2000 computer problem will be watching as the Global Positioning System experiences an end-of-week rollover Aug. 21.

The Y2K bug watchers will follow the transition from one 1,024-week cycle to another, because of similar potential consequences: possible receiver failure, malfunctions, and inaccurate time and location data -- an early taste of troubles that Y2K could generate as the positioning system's timekeeping cycle resets to a new cycle.

"We can't consider ourselves ready for contingencies, such as Y2K, if we don't test our ability to organize and effectively manage situations," said Capt. John Rankin, Air Force Materiel Command deputy Y2K program manager. "We don't anticipate any adverse mission impacts, but we have to be ready to respond regardless of our expectations."

GPS computes time and date values based on a 1,024-week cycle, instead of a 365-day year. Inaugurated Jan. 6, 1980, this unusual timekeeping system uses a 10-digit binary number to mark time. The cycle runs out of 10-digit numbers at midnight between August 21 and 22.

The 24 GPS satellites that orbit 12,000 miles above Earth are typically used for navigation; however, GPS also serves as a precise clock that feeds and synchronizes time for countless system applications throughout the world.

GPS generates a time stamp on its satellite transmissions ensuring the correct data from each satellite is used. The system uses composite readings from 230 atomic clocks around the globe to track absolute and relative time down to a nanosecond. With such extraordinary accuracy, GPS receivers are used in local and wide area networks, bank automated teller machine systems, public utilities, radar nets and cellular phone towers to synchronize transactions and transmissions.

The GPS Joint Program Office at the Space and Missile Center, Los Angeles Air Force Base, Calif., reports GPS satellites are unaffected by the EOW rollover and Y2K key dates in 1999 and 2000; however, GPS receivers and ground equipment can be affected, especially if they were procured by other than the GPS program office.

When other sources were used to acquire GPS receivers -- notably small, hand-held commercial receivers -- users should contact the manufacturers to determine EOW compliance.

To counter possible EOW problems, users should have contingency plans with suitable workarounds or recovery procedures. For a majority of problems that could be encountered, simply cycling the power of the receiver, clearing the memory and obtaining a new almanac should solve the problem. Users should contact manufacturers to learn about their specific receivers.

Part of the Y2K "dress rehearsal" will involve activation of headquarters and base battle staffs throughout the command. Activation will enable the command to exercise and test its recently published Y2K Consequence Management Plan.

The GPS rollover and other Y2K-related information are available for military readers at the Space & Missile Center located at http://www.laafb.af.mil/SMC/CZ/homepage/y2000/body.htm.

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-- Linkmeister (link@librarian.edu), August 10, 1999.

Susan,

If the options "on foreign markets" are contracts in US markets, then any potential foreign GPS problems would be likely to benefit your puts. If the contracts that you might be buying are themselves in foreign markets, then I cannot offer any pertinent comments other than to say: check out the policies and track records of their equivalents of the US Options Clearing Corp (which started prepping for Y2K in 1985, not 1995, 1985!).

Jerry (who bought a few more DJX puts today)

-- Jerry B (skeptic76@erols.com), August 10, 1999.

Advice for all you "BEARS" out there......

I truly hope that all of you betting (puts) on the downward spiral of the S&P and the Dow are buying "in the money" puts. Buying "out of the money" puts will likely result in losses on your behalf. Puts DO NOT act like "out of the money"calls...the "in the money" puts will increase your chances of "winning"dramatically......just food for thought.

Good Luck

p.s. Susan, GPS rollover will likely have no effect on financial transactions.

-- mark (marklin333@yahoo.com), August 10, 1999.

The in the money puts during a crash can get way to expensive for anyone else to buy. I think a better bet is about one or two hundred dollar contracts, which could go as high as $3000 each. The in the money puts in relation to that could go as high as $70,000 per contract. Now who has money to buy that high a priced put in the hopes to make more money on that put! NOBODY! Cheap options is much safer and will be much easier to dump when you've made enough money!

-- freddie (freddie@thefreeloader.com), August 10, 1999.

freddie wrote: "The in the money puts during a crash can get way to expensive for anyone else to buy."

The liquidity of a deep in the money option is in direct proportion to the liquidity of the underlying instrument.

Susan: Your concern about being able to exit the trade is valid and is part of the risk to be considered in any speculation. Closing positions in fast markets, like the crash of 1987, is dependent on lines of communication being open.

My opinion is if there is a GPS related risk in the market's ability to operate it will show up in price action before the event.

Don't bet the rent money, only speculate with funds that can afford to be lost.

Regards,

-- Tom Beckner (xouttbeckner@erols.com), August 10, 1999.

Mark, Regarding the statement: "Puts DO NOT act like "out of the money" calls..", could you elaborate somewhat. Jerry
(Who buys out of the money puts)

-- Jerry B (skeptic76@erols.com), August 10, 1999.

Mark,

Regarding the statement: "Puts DO NOT act like "out of the money" calls..", could you elaborate somewhat.

Jerry
(Who buys out of the money puts)

-- Jerry B (skeptic76@erols.com), August 10, 1999.

The rollover will occur here in the US next week Saturday evening, just before 7 PM CDT. I doubt that there will be many transactions in precess during the rollover. If the receiver is not compliant, then the following Monday morning would be I think Jan 2, 1980. Could lead to some interesting interest calculations.

-- Mikey2k (mikey2k@he.wont.eat.it), August 10, 1999.

FWIW:

While waiting for a possible reply to my earlier post to Mark, I will go ahead and suggest a view rather contrary to one that he posted. In my view the only kind of options to buy are out of the money contracts, and, when anticiating a very large move, I usually prefer *very* out of the money contracts.

Jerry

-- Jerry B (skeptic76@erols.com), August 10, 1999.