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Who says derivatives can't be fun? When Gary Gastineau, senior vp in derivative new product development for the American Stock Exchange, headed off to the beach for a vacation this winter, he lugged along a thick treatise on hedging by Prof. Henry Hu of the University of Texas. The paper, called "Hedging Expectations, Derivative Reality, and the Law and Finance of the Corporate Objective," is relaxing reading for Gastineau.
When Gastineau reached Hu's 225th and 226th footnotes, he had a brainstorm for a new derivative product. The result: stock index options on the Amex Gold BUGS Index, a product slated to be launched in about a month. (BUGS stands for Basket of Unhedged Gold Stocks.)
And in an act of courtesy which is not typical of the fiercely competitive derivatives business, Gastineau gave the new index options product the ticker symbol HUI. That's "HU" for Prof. Hu and "I" to mark it as an index product.
Both Gastineau and Hu are well-known in the derivatives world: Gastineau is widely recognized as...