Fund redemptions

must be pretty significant. $x billion funds are now x * .65 * .80 = half your AUM jan 1. you get redemption calls all day and then you get to 3:00 and realize you need more cash… sellsellsell and bam we’re down another 500 in the last hour every day?

interesting theory…

Yeah, and margin calls the next day. It’s a vicious cycle. I’m relieving some of those shareholders of their shares. It hurts but I’m here to help.

I give props to your iron stomach…or your brain of jello…its one of the two and only time will tell.

Isnt cash raised in the morning, *BEFORE* 3pm?

commstudent Wrote: ------------------------------------------------------- > Isnt cash raised in the morning, *BEFORE* 3pm? could be. I was searching for first hand info I guess. I have been told in the past that inflows into popular $billion funds are typically more than enough to cover redemptions. This right here is obviously not typical. My thoughts were some cash is held but throughout the day as calls add up with people throwing in the towel the tally exceeds the inflows + cash held. So I figured at some point during a day they would need to generate more cash. 3:00 was just a stab. I mean by then some buzzer must sound off and the intern with the goggles might scream “Yoyoyo, this morning we had $x million cash and we need 4*$x million , umm somebody call some traders quick before 4:00.”

I have heard about this and some hedgies getting crushed with redemptions. Something has to explain the cliffs we have walked off in the last hour of trading lately. The last 20% (last 7 trading days) drop could be due to the fact that the office wasn’t on last week. I am glad I get to see something funny today. :slight_smile:

I agree that some of the sell-offs in the last hour are due to house calls and exchange calls. In our brokerage area, we’ve seen a huge spike in calls the last several weeks (as I’m sure a lot of other firms have) and people are selling rather than wiring in cash to cover their calls…

Also, people like to wait until the last hour to sell to cover their calls in hopes the market will rally and they won’t need to sell as many shares…