Deutsch Bank

Discussion in 'Stocks' started by Spectre2007, Mar 24, 2016.

  1. just21


  2. Ticking time bomb.....
    #42     Sep 26, 2016
  3. image.jpg
    #43     Sep 26, 2016
  4. Sig


    Are you pointing out that $16.4B in capital still thinks the company isn't going to go under?
    #44     Sep 26, 2016
  5. That capital still not enough, as stock price goes lower it triggers derivatives that collapse it lower. The sharks are pressing it just need to get to that magic number where it all falls apart.
    #45     Sep 26, 2016
  6. Sig


    Where can I find out more about the specifics of these derivatives?
    #46     Sep 26, 2016
  7. (((the event of non-performance, the rush to liquidate collateral may trigger market selloff, or exacerbate a selloff already underway. It quickly escalates in a vicious circle, otherwise known as positive feedback loop. A good albeit extreme illustration of positive feedback loop is the nuclear chain reaction. The selloff causes sharp reduction in market prices, e.g. fixed income instruments but also equity, credit default swaps (use to hedge credit risks), etc. The liquidation of collateral catalyzes selloff, which further depresses prices, driving more transactions in the red and requiring more margin calls and liquidation. Ultimately it may trigger price collapse across markets, way below their intrinsic valuation.)))
    #47     Sep 26, 2016
  8. So I take it you'd advocate shorting DB, which is currently at 11.85... what are your stop-loss and take-π levels?
    #48     Sep 26, 2016
  9. image.jpg
    #49     Sep 26, 2016
  10. Sig


    That's not specifics. Specifics would be "There is a $5B Dec 2017 Note outstanding that becomes due in full when market cap falls below $15B". Hope is not a strategy, and the problem with going short DB is you have to hope that both this derivative chain exists and hope that the German govt won't intervene, IMO. There are a lot of shorts with a similar risk reward picture without the chance of govt intervention, and if I was counting on a derivatives house of cards I'd be doing some digging to see if it actually exists and if so what the proximate triggers are.

    Of course if you're just looking forward to some schadenfreude to see a big IB go under, in that case I guess it's all upside.
    #50     Sep 26, 2016