Ltcm in a sentence

Because these losses reduced the capital base of LTCM, and its ability to maintain the magnitude of its existing portfolio, LTCM was forced to liquidate a number of its positions at a highly unfavorable moment and suffer further losses.

That famously ended badly for LTCM.

According to Lowenstein (p. 234), LTCM lost $286 million in equity pairs trading and more than half of this loss is accounted for by the Royal Dutch Shell trade.

After LTCM failed to raise more money on its own, it became clear it was running out of options.

After the bailout by the other investors, the panic abated, and the positions formerly held by LTCM were eventually liquidated at a small profit to the rescuers.

Although LTCM was diversified the nature of their strategy implied an exposure to a latent factor risk of the price of liquidity across markets.

Although termed a bailout, the transaction effectively amounted to an orderly liquidation of the positions held by LTCM with creditor involvement and supervision by the Federal Reserve Bank.

As rumours of LTCM's difficulties spread, some market participants positioned in anticipation of a forced liquidation.

Because LTCM was not the only fund pursuing such a strategy, and because the proprietary trading desks of the banks also held some similar trades, the divergence from fair value was made worse as these other positions were also liquidated.

Eventually this caused LTCM to fold, and their creditors had to arrange a bail-out.

Indeed, much of LTCM's capital was composed of funds from the same financial professionals with whom it traded.

In order to hedge its exposure from being short the call option, UBS also purchased 1 million of LTCM shares.

In order to maintain their portfolio, LTCM was therefore dependent on the willingness of its counterparties in the government bond (repo) market to continue to finance their portfolio.

In the autumn of 1998 large defaults on Russian debt created significant losses for the hedge fund and LTCM had to unwind several positions.

Lowenstein reports that the premium of Royal Dutch had increased to about 22 percent and LTCM had to close the position and incur a loss.

Lowenstein reports that the premium of Royal Dutch had increased to about 22%, which implies that LTCM incurred a large loss on this arbitrage strategy.

LTCM lost $286 million in equity pairs trading and more than half of this loss is accounted for by the Royal Dutch Shell trade.

LTCM purchased a call option on 1 million of their own shares (valued then at $800 million) for a premium paid to UBS of $300 million.

LTCM quickly became the largest client of the hedge fund desk, generating $15 million in fees annually.

LTCM's partners received a 10% stake, still worth about $400 million, but this money was completely consumed by their debts.