The Volkswagen squeeze

The revelation in October that German car manufacturer Porsche owned more of Volkswagen (VW) than had been thought sent the stock price of VW yo-yoing. The volatility caused huge losses on relative value trades put on by hedge funds. Ryan Davidson reports


Porsche was once described as a "hedge fund with a car showroom" by Max Warburton, an analyst at New York-based investment management firm Alliance Bernstein. Many market participants felt there was good reason. The Stuttgart-based car manufacturer has consistently made huge sums of money through its equity options portfolio - in some years, more than it generated by making cars.

In its most recent earnings release, on November 7, the company revealed it had made a EUR6.83 billion gain on cash

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What gold's rise means for rates, equities

It has been several years since we have seen volatility in gold. An increase in gold volatility can typically be associated with a change in sentiment and investor behavior. The precious metal has surged this year on increased demand for safe haven…

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