One of the derivatives instruments that LTCM used was total-return swaps, contracts that facilitate 100% leverage in various markets, including stocks. For example, Party A to a contract, usually a bank, puts up all of the money for the purchase of a stock while Party B, without putting up any capital, agrees that at a future date it will receive any gain or pay any loss that the bank realizes.
在所有衍生性金融商品中，全收益交换是LTCM经常使用的工具之一，这类的合约使得该公司可以运用100%的杠杆在各种市场进行套利，也包含股票市场，举例来说，合约的一方A，通常是一家银行，必须投入百分之百的资金买进股票，而在此同时，合约的另一方B，却可以不必投入任何资金，B公司就可以约定在未来的某个日子时，取得或负担A银行所实现的利益或损失。
Total-return swaps of this type make a joke of margin requirements. Beyond that, other types of derivatives severely curtail the ability of regulators to curb leverage and generally get their arms around the risk profiles of banks, insurers and other financial institutions. Similarly, even experienced investors and analysts encounter major problems in analyzing the financial condition of firms that are heavily involved with derivatives contracts. When Charlie and I finish reading the long footnotes detailing the derivatives activities of major banks, the only thing we understand is that we don’t understand how much risk the institution is running.
