If you're reading all caps rumors from chat rooms but the source is literally given as "SOURCE" -- perhaps take a second to reflect on how reliable you think it is?
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macrocephalopod Retweeted Andrew Fisher
macrocephalopod added,
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macrocephalopod Retweeted Andrew Fisher
Not a single soul able to explain how this actually worked, given that collateral is literally cash/assets that you wire to your brokers account. But “SOURCES” though!https://twitter.com/acpandy/status/1377187837204787205 …
macrocephalopod added,
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Replying to @macrocephalopod
Theoretically… Borrow money from PB for use as initial margin, secured on cash/other assets held elsewhere (eg precious metals). This happens. Do that multiple times with same underlying security. This should not happen.
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"the bank holding the cash goes to another school, you wouldn't know her" is such an obvious trick but something like it has passed big 4 audit and BaFin investigation in the last 6-months.
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Oh yes, completely agree this is possible -- but this is not how margining a TRS with your prime broker works! CSA normally says you post variation margin daily. If the collateral is not literally in your broker's account, it is basically an uncollateralised loan ;)
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Replying to @macrocephalopod @dsquareddigest and
Idea by
@1867ben that you could get a loan secured against assets (but without depositing collateral) and use the proceeds to fund additional margin for collateralised lending is interesting.2 replies 0 retweets 2 likes
Getting well past my level of expertise now though
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