By - bitemenow999
Not hard, but you need significant capital to be able to engage a proper investment bank who will warehouse the risk. The first step would be to get an ISDA in place. Follow that up with a request for a quote. Goldman, for example, will make you a market on if the sun will come up tomorrow. However I can promise you won’t like the price given.
So 25mm+ capital and lot of other business you can give the bank == your dream fulfilled.
25mm capital won't get your pinky through the door at a bb hahaha
A 25 mm deal might be possible if you already do hundreds of millions+ in business
You can have low 10s of millions and get ISDAs in place if you’ll generate enough revenue. Think stat arb, quant-a-mental, or latency driven strats that generate a lot of commission. In certain countries it is advantageous to trade on swap to avoid certain taxes / fees. It can also allow you to trade countries restricted in some way without going through the pain of getting an onshore presence. You get synthetic exposure on swap by trading with your brokers delta one desk who is onshore.
Even multi-billion dollar funds can be structured with lots of sub funds. Docs are usually signed at this level, so technically an ISDA may be in place with a fund with very little capital. If your lawyers are good there is no recourse to the master fund should the sub fund explode.
Was I throwing out a random number that I knew OP didn’t have, yup. Do I know what I’m talking about, yup. Is an ISDA a magical agreement that lets you trade/get exposure to anything you want, nope. You’ll need a whole suite of agreements in place to have any fun.
I thought the requirement for an IDSA was 1.5 billion
Homie is getting his info from the big short lmaoooo
On a serious note, no you do not need 1.5 billion to enter a master ISDA. I’ve seen investment funds with 100MM with a couple ISDAs in place at my work
Can’t always rely on a movie for you information.
Wait.... so you're telling me these MBS bonds aren't AAA?
Have you seen The Big Short?
nope, my computer on principle only plays porn also I try not to watch investment/stock market-related movies, historically it just boosts my worst intuitions...
A man of taste and refinement! Huzzah!
Well, I can definitely call up someone very senior at a big firm/bank...
not sure they will pick up though...
Sort by age, not position. This will boost your chances.
Don't make this variant bigger than it is, it's just fear porn at this point. Yes people overreact in the short term but they tried it with Delta and look where we are now. Unless something completely different comes out as a new pandemic *cough* smallpox *cough* then I wouldn't worry about it for any longer than a week
How dare you insert calm and reason into my fear porn!
It's like finding out that delicious red chart is a paper account.
you need an isda/prime brokerage agreement to be able to create your own instrument (usually in a form of a swap contract). the idea that you need a billion dollar capital is a myth, but you still need to be a big player. jpmorgan, goldman, bofa are your typical go tos, but credit suisse and deutsche bank are severely underrated.
Step 1: Have ten million to invest.
Step 2: Open a prime brokerage account.
Step 3: Negotiate a custom derivative contract with an investment banker.
I feel like 10 mil wouldn't even get you an appointment for something like this, but i wouldn't personally know. I would guess you would need about 100x that, if not more, to make the risk palatable for an entity capable of creating a bespoke financial instrument.
Mid to high tens of millions should be enough. The lower the risk they take on and the more frequently you'll make them money with it, the sooner they'll listen.
You need billions, typically, to get an ISDA.
well I guess then its a no go, given I am a couple of zeros short
This guy fuks
I'm willing to bet you're a few more b than a couple. With the market always being out to get ya at least.
ya well if you are nitpicking, exactly about 4-couples of zero short...
private bank/IB actually make a lot of "exotic" stuff, all can be customized. I had a fortunate to get paid reading some of those prospectus.
Take a bunch of old paper EE bonds, glue them into a composite, and turn them on a lathe into a woodwind instrument. Make the valves out of gold bullion you have laying around.
We could make a crypto. Easy to get that up to $10m market cap