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I think the most interesting part is not the tax, but this: The options also were attractive because they limited the risk of loss to the amount paid for each
by Tycho 11y ago
I think the most interesting part is not the tax, but this:
The options also were attractive because they limited the risk of loss to the amount paid for each option, Renaissance said.
“No other investment structure of which we are aware provides both high leverage and loss protection,” Renaissance said.
- refurb 11y agoAnyone else find this kind of "scammy" sounding? How can they have a 35% average annual return over the past 25 years and guarantee that you won't take a loss at all? Reminds me of Madoff.
- Tycho 11y agoI think the most likely explanation is that they were just shifting all the tail risk to DB and Barclays, who didn't know any better or thought the portfolios would never experience losses beyond the option premium.