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drewg__'s profile
drew
drew
drew
@drewg__

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drew

@drewg__

electronic trading technologist, illiquid commodity futures enthusiast, hedge fund/HFT apologist, big idiot

NYC
Joined April 2009

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    1. ONAN‏ @ONAN_OUS 8 Oct 2020

      I had a coworker who structured a collared prepaid forward that got written up by @matt_levine at Dealbreaker and he said it was the best moment of his career. Regulators deemed it ‘too beautiful to live’https://www.nytimes.com/2020/10/08/business/matt-levine-bloomberg.html …

      4 replies 4 retweets 97 likes
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    2. ONAN‏ @ONAN_OUS 8 Oct 2020

      6am explainer: Let’s say you run a private auto parts company and like a good Japanese corporate you have a large 3% stake in your biggest customer, General Motors

      1 reply 0 retweets 2 likes
      Show this thread
    3. ONAN‏ @ONAN_OUS 8 Oct 2020

      Your votes are valuable for protecting the company from activists and keeping the board and management in control of the company. You probably can call the CEO whenever you feel like it. It’s a sweet setup!

      1 reply 0 retweets 2 likes
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    4. ONAN‏ @ONAN_OUS 8 Oct 2020

      Let’s say your company comes into a bit of financial distress and you’re already levered up and the easiest thing to do is to sell the GM equity. But you like voting! And having a large ownership stake! So what do you do? A variable prepaid forward!

      1 reply 0 retweets 2 likes
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    5. ONAN‏ @ONAN_OUS 8 Oct 2020

      A @matt_levine comes up and says “I will give you $5bn now, and you can give me your shares in 3 years. You get to keep voting but for balance sheet purposes you no longer have any delta on the stock!”

      2 replies 0 retweets 5 likes
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    6. ONAN‏ @ONAN_OUS 8 Oct 2020

      The beauty of derivatives is separating financial interest in something with the physical ownership of the thing, and transmuting the nature of cash flows for accounting (and maybe tax) purposes

      2 replies 1 retweet 15 likes
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      drew‏ @drewg__ 8 Oct 2020
      Replying to @ONAN_OUS

      Lol "and maybe tax"

      6:18 AM - 8 Oct 2020
      1 reply 0 retweets 1 like
        1. ONAN‏ @ONAN_OUS 8 Oct 2020
          Replying to @drewg__

          As long as a client doesn’t explicitly say they’re doing something for tax reasons it’s fine for the dealer to facilitate it

          0 replies 0 retweets 2 likes
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