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03:10
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Originally posted by wb200
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I'm still trying to figure out what OP has been up to, especially given they are long MLX via swaps as well. My guess is the following: MLX must be a sizable position in OP's portfolio. For some reason they need to raise cash. OP decides to sell MLX stock to raise cash but wants to retain MLX long exposure (at least initially) buy being long MLX via equity swap. Enter a friendly investment bank, BAML. They buy the shares from OP and take the short side of the swap. That's how BAML ends up being a substantial holder via its newly acquired inventory of MLX shares. Why does BAML do this? They can earn fees & interest in 2 ways: 1) financing terms of the swap and 2) lending MLX shares to short sellers.
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I work in finance and my brain still hurts reading that
(20min delay)