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
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Equity markets
The future of equity derivatives: perspectives for UK equities and dividends
Managing equity and dividend risk today requires new trading strategies and products. In a webinar convened by Risk.net and hosted by Eurex, three experts discuss what’s next for the UK and European markets.
Follow the moneyness
Barclays quants extend Bergomi’s skew stickiness ratio to all strikes
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…
Breaking the collateral silos – Navigating regulation with a strategic alternative
Emmanuel Denis, head of tri‑party services at BNP Paribas Securities Services, discusses why financial institutions must rethink old practices of collateral management and instead adopt a tri-party approach, with which equities can be managed as…
BAML and Morgan Stanley shift Indian P-notes to Europe
Tax changes trigger move out of Mauritius and Singapore
Volatility traders wrestle with digital risk of Brexit
Skew on major indexes leaps after market wakes up to risks of UK's referendum
New US tax rules could hamper ETN market, dealers warn
IRS’s forthcoming Section 871(m) rules could inadvertently capture legacy ETNs
Dealers fear death of dividend risk premia strategy
Shrinking dividend futures premium hurting investors
