You don’t quite have this right! The Bespoke research assumes that that Archegos maintained a constant 5:1 leverage, ie they were leveraged 5:1 on 31st Dec and then continued to buy stock to maintain 5:1 lev as prices went up after that.
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Replying to @kate10010
macrocephalopod Retweeted George Pearkes
e.g. see here, but yes $100b is nowhere near street estimates of total losses (Archegos + CS + Nomura + the rest)https://twitter.com/pearkes/status/1378437699946868744 …
macrocephalopod added,
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Replying to @macrocephalopod @kate10010
Would need to keep buying to maintain 5:1 leverage, eg if holdings rose 20% you have now 2x’d your portfolio but value of your holdings is only 20% more so your leverage has fallen to 3:1, need to buy more to get it back up to 5:1
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Replying to @kate10010
Yeah I think that’s exactly what it is. People love to report big numbers!
2:09 PM - 3 Apr 2021
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