Mr. MacDonald, who plans to retire at 63, said he considered directing the account into less volatile securities but did not change anything.

The regulations would be the first to require certain sellers of derivatives to determine whether these potentially volatile financial securities are suitable for their customers.

The aggressive tactics can take many forms including selecting more volatile securities, selling short or using options.

But some funds are making equally speculative investments in the low-priced, volatile securities called penny stocks, investments with hazards long acknowledged by Federal and state regulators.

First, it will buy from the fund about $160 million of the most volatile mortgaged-backed securities, known as "interest-only" and "principal only" securities.

These European institutions are risking a prized possession - their top credit ratings - by entering New York's volatile securities trading markets.

State regulators oversee state-chartered banks, and have varying rules on the extent to which the institutions they regulate can invest in volatile securities.

Beyond that, innovative ways to raise capital in the new world of more volatile securities markets loosened the traditional ties between corporations and their investment banker advisers.

Derivatives are potentially volatile securities or contracts based on the value of Treasury bonds, stocks or other assets.

Options, particularly exchange-traded options, are highly volatile securities whose market prices can change rapidly.