Goldman Sachs (GS) has offered a financial product to hedge funds that allows them to take a short or long position on corporate loans, Reuters reported, citing a source familiar with the matter.
Total return swap is a derivative contract that enables investors to profit from changes in the market value of loans, the March 10, Tuesday, report by the newswire noted.
However, no trades have yet been executed using this strategy, according to the source.
The New York-based banking giant has reportedly offered complex trades to investors, which can lead to profit-making from further falls in loans made to software companies.
Software stock prices have seen a sharp fall amid investor concerns that AI could disrupt the traditional business models.
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