Year: 2024
Type: article
Abstract: On March 26, 2021, Archegos, the family fund office managed by hedge fund manager Bill Hwang, exploded, and the heavily held stocks under his management were sold, with a total amount of $20 billion, and the market value of the related stocks was wiped out by about $33 billion. This huge event has aroused widespread attention in the financial world, but also sounded the alarm for individual investors. This paper analyzes the process of Archegos' implosion, and analyzes the reasons for the implosion: the extensive use of financial derivatives, the concentration of investment strategies and the abuse of leverage. Then it provides relevant suggestions for individual investors to better participate in the financial market: establishing effective investment portfolio, be cautious to leverage, robust risk management and continuous monitoring. Based on the analysis of Bill Hwang event, this article provides reference for individual investors to identify investment risks, choose better investment strategies and more effective risk management.
Author: Qiao Tang
Institution: University of Nottingham Ningbo China
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4404867596