Major banks are peddling Accumulatur Structures on Nvidia to HNIs.

    Accumulators aka "I kill you later" is a contract between a buyer and a seller,

    1) Buyer commits to buy a fixed amount of shares periodically (daily/weekly) at a pre determined price for a certain period (eg 1 year).
    *This price is at discount to current price of the stock. In this specific case, 93$ per Nvidia share

    2) If the stock price rise above a certain threshold then a 'knockout' clause is activated. The buyer is allowed to keep the stocks accumulated between the start of the contract and the time till knockout is activated. Once knockout is triggered, the contract stands cancelled. In this specific case, it is 130$ per share of Nvidia.

    3) If the stock price falls below the pre determined price (in this case 93$ per Nvidia share), buyer has to buy 2X the number of shares at the pre determined price.

    Of course, there are some institutions/hedge funds on the other side of the contract.

    Current price of Nvidia [24th Sept] is 115$-116$.

    That means the band is as per below:

    15$-14$ [Knockout Price] <– Current Price –> 22$-23$ [Pre determined Price]

    Beers sharpening claws: Nvidia?
    byu/Option_Closeout inoptions



    Posted by Option_Closeout

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