Total return swap and the archegos collapse: Lessons from a spectacular failure
Yunzhi Lin
Australian National University
DOI: https://doi.org/10.59429/bam.v7i2.10528
Keywords: TRS; Archegos; Bill hwang
Abstract
This study investigates the reason for the failure of Bill Hwang. We analyzed the application of total return swap(TRS) in this event and its two advantages: good concealment and ability for high leverage. We concluded that the failure of Bill Hwang is due to over-leveraged position by using TRS. This article also gives some advice on the regulatory of TRS.
References
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