We’re going to hear a lot about equity total return swaps over the next couple of days but let me take a second to point out how extremely normal they are and how unsurprising it should be to find out that Archegos was using them.
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In a TRS you agree with the bank to receive price appreciation + dividends on one leg, and financing/borrow/fees on the other leg. They can be short duration swaps (in which case you roll them if you want to keep exposure) or longer term (in which case you
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would need to unwind the swap to get out of the position). TRS are extremely liquid and more common than single name forwards.
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