What's worse than a Texas Hedge?

B

Brighton

I'm trying to remember the name of the trading 'strategy' where someone puts on a position so large that if it goes wrong they have no ability to cover it.

I've seen it mentioned a time or two in print and I think it's something like 'Acapulco Trade' but I can't get a hit in Google. The name refers to putting on a huge trade and then leaving the country. If it's a winner you come back to the office a hero and tell everyone about your swell vacation; if it blows up, you're in a country with no extradition treaty to the U.S.

Note: I'm not in this type of trade, just trying to remember the name.

:p
 
I think it was a Brazilian put. Brazil was chosen because there was no extradition treaty with USA. If memory serves Brazil allows police from other countries to capture people in Brazil and return them to country of origin but Brazilian police won't capture to extradite if no treaty.
 
Quote from Brighton:
----'Acapulco Trade'....
----putting on a huge trade and then leaving the country.
----If it's a winner....
----if it blows up....
More...
1) The Airport Trade :cool:
2) The O'Hare Straddle :p
 
Quote from running_bare:

Rio hedge
More...

http://www.investopedia.com/terms/r/rio-hedge.asp

Definition of 'Rio Hedge'
When a trader who is facing financial or legal troubles hedges his or her position in an investment with a ticket to a tropical location (such as Rio de Janeiro). The idea behind the Rio hedge is that if the investment goes bad (either legally or through financial loss) the investor will use the ticket to escape.

Investopedia explains 'Rio Hedge'
The Rio hedge is a joke in the investment community regarding the risks involved in trading. A traditional hedge will protect against potential financial risks associated with an investment. The Rio hedge pokes fun at protecting against risks, such as getting caught by the authorities, lenders, or owners of the funds under management.
 
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