zerohedge.com / by Tyler Durden / Feb 16, 2017 8:25 PM
Chatter about a multi-billion-dollar levered options strategy fund getting caught offside (and being forced – by its own strategy’s hedging requirements – to buy into the rally, acting as the ‘catalyst’ for the almost unprecedented move) have been rife all week and our discussions of Catalyst Capital’s NAV collapse – coinciding with the longest streak of gains in stocks in 4 years and VIX decoupling – led to a statement to CNBC earlier that their position-squaring was complete.
Now, Catalyst Capital CEO Jerry Szilagyi has reached out to Bloomberg to clear up any misunderstandings…
“Our exposure was greatly exaggerated, and our impact on the market was greatly exaggerated,” said Szilagyi by phone. “Comments that we were forced to short cover are not correct. We haven’t been forced to do anything.”
“There may have been some market impact from our trading earlier this week, but it’s certainly not the majority of the market impact, by any stretch,” said Szilagyi. “Probably Donald Trump’s tweets have had a bigger impact than our trading.”
“We’ve communicated with our shareholders over the years that this is the type of environment that’s the worst for the fund,” said Szilagyi.