Comments by "kazedcat" (@kazedcat) on "How Was Bill Hwang Able To Get So Much Leverage?" video.

  1. They own the stock they can sell them anytime. Presumably the stock they own is less than 10% so they are not required to report how much stock they owned. Archegos was buying unregulated derivatives so technically their deal with the banks is not related to the company of the stock. It is not insider because it is a private deal between two 3rd party. If you plan to give stocks to your son on his birthday and told your wife and your wife decided to the same. You and your wife is not liable for insider trading.
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  2. seneca983 It is not debt. If I buy call option from a broker it does not mean I owe them money if they bought a stock as hedge against my call. The potential losses of them owning the stock is their risk on doing business. Yes Hwang has liabilities to pay the bank in the future that he is unable to pay. But you don't count future rent liability of an apartment as debt. They are liabilities but not debt. The difference is that debt the value flows towards you first then in the future cash flow out from you. But in this case cash flow out from Hwang in the future in exchange for potential cash flow going in also in the future.
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  3. Gorky D Leverage swap is not debt. The bank owns the underlying stock so theoretically the bank could recover their money by selling the stock. The only problem is that Hwang have concentrated position on key companies so there is massive potential losses when the banks do sell the stock because selling large amount will drop the stock prize. This is where information on the stocks held for swap could have prevented the problem. The banks did not know the swap deals with other banks so they think that the stock they held is small enough that they can liquidate it without losses.
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  4. Rok Prešeren That was their plan they meet and agree to unwind the stock position slowly. But Goldman sacks backstabbed them and dump their stock before others could. This forces the other banks to also unload their position to prevent themselves from ending up holding the bag. GSget away with minor losses and they might have end up with profit buy loading in puts before dumping the stocks.
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