JPMorgan Hikes Swap Financing to Nearly 15% and Restricts Trade Sizes
JPM•JPMorgan has raised swap financing costs for hedge funds betting on SK Hynix and Samsung Electronics to as much as 11% over SOFR, translating into nearly 15% effective rates. The bank has also imposed limits on trade sizes and tightened client eligibility following the chipmakers’ sharp rallies this year.
1. Banks Raise Swap Financing Rates
JPMorgan, alongside Citigroup and Goldman Sachs, has increased financing costs for hedge funds using swaps to bet on SK Hynix and Samsung Electronics shares. The banks quoted rates between 300 basis points and 11% over SOFR, resulting in effective financing costs approaching 15%.
2. New Trade Limits and Client Restrictions
JPMorgan has capped the size of new chip equity swap trades and narrowed client eligibility criteria, joining peers such as Morgan Stanley and UBS in scaling back leveraged exposure. These measures follow SK Hynix’s share price tripling and Samsung Electronics’ 175% gain year-to-date.
