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MF Global Infographic: How the Trade Was Supposed to Work

By Alex Dumortier, CFA – Updated Apr 6, 2017 at 4:57PM

Beginning in 2010, MF Global put on a series of European sovereign bond trades ("repo-to-maturity" transactions). MF Global borrowed money to buy European sovereign bonds with the expectation of pocketing the difference between the bonds' yield and the interest rate at which it was borrowing. Click the image below to enlarge.

About the Author

Alex Dumortier, CFA
Alex Dumortier writes a twice-daily column covering topical subjects from a contrarian, value-oriented perspective; he also co-authored 'The Astonishing Collapse of MF Global'. He received his degree in Economics and Political Economy from Princeton University and began his career in the City of London. After having lived in several capital cities, Alex now resides in Washington, D.C.. When he is not reading or writing, Alex likes to run and practice Bikram yoga (a form of "hot" yoga.)
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