Re:Bill Hwang of Archegos Capital lost $20B in two days
by neatze on Wednesday May 12, 2021 @02:01PM
(#27133283)
You can get up to 12 to 1 leverage with 5+ million dollars account with most brokerage firms, but it will be substantially depended on your reputation as manager, fees you willing to pay and most importantly your market exposure. Assuming regulations did not change since 2014 or so.
Also, you have to be fairly big to get that kind of leverage. $100 million is probably too small but $1B might be enough.
So you put up $1B of your own money, and a bank would let you go long $3B and short $3B. The idea is that your longs hedge your shorts well so you can't lose too much.
Obviously, in the case of Archegos the shorts didn't hedge the longs well.