Traders cry foul over losses from SocGen actions on SIA shorts
Issuer of daily leveraged certs used what some say is an aggressive formula to calculate the price of SIA shares ex-rights
Add BT as a preferred source
DeeperDive is a beta AI feature. Refer to full articles for the facts.
Singapore
TRADERS in the 5x Short Singapore Airlines (SIA) daily leverage certificates (DLCs) saw their positions go to zero on Wednesday when SIA shares rose more than 20 per cent upon trading ex-rights.
The short squeeze was exacerbated after Societe Generale (SocGen), the issuer of the certificates, used what some traders said is an aggressive formula to calculate the price of SIA shares ex-rights. SocGen also gave them very little time to hedge their bets in reaction, the traders said.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
TRENDING NOW
Shelving S$5 billion office redevelopment plan proved ‘wise’ as geopolitical risks mount: OCBC chairman
Why where you park your joint venture matters: Lessons from a US$689 million shareholder dispute
China pips the US if Asean is forced to choose, but analysts warn against reading it like a sports result
Singaporeans can now buy record amount of yen per Singdollar
