Sid Klein began in the securities industry as a stockbroker in 1982, focusing on large-cap US value stocks and derivatives. Following Brault Guy O’Brien, Sid joined Midland Doherty in 1984 and then Prudential Bache Securities in 1987. By 1989, his focus had shifted to Japan. Actively trading long-term euro-put warrants from the peak, Sid became acquainted with the OTC derivatives business, as a result of which he began structuring long-term warrants on baskets of stocks. The focus was those stocks whose long-term performances he expected to be in-line with equities whose volatilities in the shorter run were much higher, thus causing higher volatility premiums. The life of the warrant covered a period, however, during which there would be a convergence of performance between his selected equities, with those that had had higher volatility premiums, according to his analysis.
