Investors and traders will “look to see who may have extended their balance sheets too far for the bumpy ride ahead,” he added. These margin requirements are adjusted daily to enable the bank to demand more cash if the trade goes wrong. Using derivatives known as “swaps,” Mr. Hwang had bet that the prices of certain stocks, including ViacomCBS, would rise. Shares of two Chinese companies that Archegos had also bet on — RLX Technology and GSX Techedu — also fell precipitously last week. Mr. Hwang’s firm did so initially, a person familiar with the matter said, but then it couldn’t, at which point his lenders became unnerved and began a fire sale of those stocks.

Source: New York Times March 30, 2021 00:47 UTC