they never take on directional trades of any meaning or
consequence.
Why? because if they are wrong then it would result in a
collapse of the institution and therefore it wouldn't be permitted
in the risk management rules of the company.
After working for the largest investment bank I know that
statement is false. Banks take directional bets all the time..
All they care about is "VAR" Value at Risk
They have many different groups taking directional bets, some
wind up hedging..but they protect themselves ultimately through
keeping VAR under control.
thats why in 08, many needed the bailout as the moves were quite
dramatic. I was at JPM Investment Bank and recall the many VAR
meetings we had on a hourly basis.
Anyone working in these large banks knows that this is misinformation becasue
Zero Hedge reports that further analysis of the latest quarterly ...
Posted by torvix on 8th of Jul 2015 at 08:17 am
they never take on directional trades of any meaning or consequence.
Why? because if they are wrong then it would result in a collapse of the institution and therefore it wouldn't be permitted in the risk management rules of the company.
Remember Blythe Masters? confirmed huge directional trade
Posted by wowten on 8th of Jul 2015 at 09:48 am
Remember Blythe Masters?
confirmed huge directional trade "for clients"
I would argue a totally different regulatory regime
Posted by torvix on 8th of Jul 2015 at 09:57 am
I remain sceptical of the story as prices continue to fall...
Yeah...the London whale was market
Posted by a_l_ on 8th of Jul 2015 at 09:46 am
Yeah...the London whale was market neutral.
After working for the largest
Posted by jdaswani on 8th of Jul 2015 at 09:28 am
After working for the largest investment bank I know that statement is false. Banks take directional bets all the time..
All they care about is "VAR" Value at Risk
They have many different groups taking directional bets, some wind up hedging..but they protect themselves ultimately through keeping VAR under control.
thats why in 08, many needed the bailout as the moves were quite dramatic. I was at JPM Investment Bank and recall the many VAR meetings we had on a hourly basis.
No bank would take a massive directional trade in silver
Posted by torvix on 8th of Jul 2015 at 09:44 am
putting the whole bank at risk. The article is misinformation fro the bulls.
yip, that's why we had to bail them out!
Posted by tsurplus on 8th of Jul 2015 at 09:37 am