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I think is more like "tl;dr read the fine print"; not about the leverage. I think the rules of that particular note stipulate that 80% drop in value (it dropped
by GreaterFool 9y ago
I think is more like "tl;dr read the fine print"; not about the leverage. I think the rules of that particular note stipulate that 80% drop in value (it dropped more than that) triggers liquidation event. So you can't wait out the plunge. If I understand correctly Credit Suisse walks away, closes down their hedges, most likely loses nothing. And your shares go to 0.
- onecooldev24 9y agoAnd they charge you expense for 8 years, which is how they make money.
- schrectacular 9y agoYeah you are right. More details are coming out and it looks like there is some shadiness because Credit Suisse was the custodian AND largest shareholder. See this article: http://www.cmlviz.com/cmld3b/index.php?number=11930&app=news&cml_article_id=20180206_the-astonishing-story-behind-what-really-happened-to-xiv http://www.cmlviz.com/cmld3b/index.php?number=11930&app=news...