Risk management mistakes associated with Bill Hwang's blow-up

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Bankers, brokers, mortgage brokers would much rather make big loans than small loans\assume they will be paid back. That may or may not be a correct assumption/LOL
The edgemarkets.com reported ''billions of derivatives''
But that article also noted banks favor them because of reserve requirements + tax favored in some areas .
MS + GS forced the sale, but must have been a bad loss/they would have preferred to keep collecting interest/i'm sure/LOL

 

Which U.S. broker provides 5x margin? I hope you're not talking about crypto trading like at BitMex.

 

Bill did it with several prime brokers and all had no clue he was leveraging with others as well. This explains his overuse of leverage to the tune of 5x.

 

No you don't. It's USD$25,000 to start.

 

4:1 is for "day" trading. You better close out your positions at 4:1 leverage at the close, otherwise you'll get a margin call.

 

He even may have hedged his positions with otm puts at other accounts not tied to his main fund.

 

$25,000 is the pattern daytrader rule. $2,000 for Reg T margin, $100,000 for portfolio margin.

 

Portfolio margin is 6 times or 15%. Need a $100,000 and approval at retail brokerages.

 

Whenever something blew up, Goldman is in the neighborhood. Well, this is just another coincidence. The market is not really free but of movers and shakers.

 

Of course, and the chaos from GS are infamous for fucking even their colleagues at other houses they just shook hands with and agreed to settle this in unison. Nice stab in the back as usual. Self preservation is the name of the game. Except what surprises me is that inter dealer brokers and everyone else continues to do business with then despite uncountable past betrayals. Like a spouse in domestic violence cases who can't get him/herself to leave. It's not that they pay their staff better than everyone else because they don't.