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CFTC Quietly Bails Out Capital One


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 Cloudy 
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https://www.zerohedge.com/markets/cftc-quietly-bails-out-capital-one


"In short, CapitalOne made a terrible trade, betting via derivatives that oil would not plunge to where it is now - at 17 year lows - and only CFTC intervention prevented a margin call of unknown magnitude"


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 SMCJB 
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Temporarily exempting a bank from a requirement to register as a “Major Swap Participant” is not bailing them out. I suspect what has happened here is that the Bank has hedged positions with its customers and the market has moved so much that the PnL on the customer sides has suddenly become so large they have to register with the CFTC. The assertion that if prices do not recover by September they will have issues is also probably incorrect. The part of the crude curve that has moved and created this exposure is the next 3 months. By September this exposure will have expired/priced off their books.


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