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The part that bothered me is that, as I recall, there was no actual margin call in the movie. I guess it all was done in advance of a margin call? I don't recal

by HWR_14 5y ago

The part that bothered me is that, as I recall, there was no actual margin call in the movie. I guess it all was done in advance of a margin call? I don't recall exactly. Great movie though

awad 5y ago
The plot centers around the possibility of going bankrupt given the high amount of leverage being used on volatile mortgage securities that were starting to fail IIRC. The scheme they cook up to offload their as much of their position as possible the next morning.
SkipperCat 5y ago
By dumping all their portfolio, they avoided the margin call which would have destroyed the company. Their early and bold actions saved the firm. Sadly for the folks on the other end of the trades, it probably crushed them. Margin call is by far the best movie about the financial crisis of 2008 that I've ever seen. I was working in the biz at that time and it all just rang so true. 7 AM pre-market meetings, lots of folks crunching data, Wall Street people actually living in Brooklyn and so much more. Sadly, the movie is so esoteric that it never had a mainstream success. Such a shame because it had great actors and a fantastic script.
wozer 5y ago
Do large institutional investors even get margin calls? I thought this only happens to customers of brokers.
- gowld 5y ago
  Anyone who borrows a lot and has unrealized losses can get margin called.
- chollida1 5y ago
  https://www.bnnbloomberg.ca/goldman-u-turn-on-hwang-put-bank-at-nexus-of-margin-call-mayhem-1.1583429 https://www.bnnbloomberg.ca/goldman-u-turn-on-hwang-put-bank... You bet they do. But like all things the more money you have the better you get treated. Small retail investor, your margin call is likely automatic with assets sold without your input to take the money. large hedge fund. Tables of lawyers deciding how much you have to put up, at what time, and what can you move out of that bank before you pay.
- SkipperCat 5y ago
  It pretty much happened to Knight Trading. They turned on a dev trading algo and wound up acquiring a massive amount of positions (and thus risk). Their clearing firm forced them to close all those positions and the cost of crossing the bid-ask spread wiped them out. Never read the book (http://www.knightmareonwallstreet.com/ http://www.knightmareonwallstreet.com/) but watched it happen in real time from the trade desk at a different firm. You could also say it happens to small banks. If you fail some sort of FDIC testing, you're classified as at-risk and they force you to sell to a larger bank so as not to risk depositor funds.

by HWR_14 5y ago

The part that bothered me is that, as I recall, there was no actual margin call in the movie. I guess it all was done in advance of a margin call? I don't recall exactly. Great movie though

awad 5y ago

The plot centers around the possibility of going bankrupt given the high amount of leverage being used on volatile mortgage securities that were starting to fail IIRC. The scheme they cook up to offload their as much of their position as possible the next morning.

SkipperCat 5y ago

By dumping all their portfolio, they avoided the margin call which would have destroyed the company. Their early and bold actions saved the firm. Sadly for the folks on the other end of the trades, it probably crushed them. Margin call is by far the best movie about the financial crisis of 2008 that I've ever seen. I was working in the biz at that time and it all just rang so true. 7 AM pre-market meetings, lots of folks crunching data, Wall Street people actually living in Brooklyn and so much more. Sadly, the movie is so esoteric that it never had a mainstream success. Such a shame because it had great actors and a fantastic script.

wozer 5y ago

Do large institutional investors even get margin calls? I thought this only happens to customers of brokers.

gowld 5y ago
Anyone who borrows a lot and has unrealized losses can get margin called.
chollida1 5y ago
https://www.bnnbloomberg.ca/goldman-u-turn-on-hwang-put-bank-at-nexus-of-margin-call-mayhem-1.1583429 https://www.bnnbloomberg.ca/goldman-u-turn-on-hwang-put-bank... You bet they do. But like all things the more money you have the better you get treated. Small retail investor, your margin call is likely automatic with assets sold without your input to take the money. large hedge fund. Tables of lawyers deciding how much you have to put up, at what time, and what can you move out of that bank before you pay.
SkipperCat 5y ago
It pretty much happened to Knight Trading. They turned on a dev trading algo and wound up acquiring a massive amount of positions (and thus risk). Their clearing firm forced them to close all those positions and the cost of crossing the bid-ask spread wiped them out. Never read the book (http://www.knightmareonwallstreet.com/ http://www.knightmareonwallstreet.com/) but watched it happen in real time from the trade desk at a different firm. You could also say it happens to small banks. If you fail some sort of FDIC testing, you're classified as at-risk and they force you to sell to a larger bank so as not to risk depositor funds.