# Archegos Capital

> In March 2021, family office Archegos Capital collapsed, causing banks over $10 billion in losses. Learn how total return swaps hid its leverage and the lessons.

Source: https://learn.tradelabsai.com/history/archegos-capital/  
Track: Market History · Level: Beginner · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Archegos Capital", https://learn.tradelabsai.com/history/archegos-capital/

Archegos Capital Management was the family office of Bill Hwang, a former hedge fund manager. As a family office managing its own money, it faced lighter disclosure rules than a hedge fund. Using total return swaps with several banks, Archegos built enormous, concentrated, leveraged positions in a small number of stocks. When some of those stocks fell sharply in late March 2021, it could not meet margin calls. The banks dumped its positions, and some lost billions. Credit Suisse alone lost about $5.5 billion, a blow that contributed to the bank's later troubles.

## How Archegos built its positions

| Feature | Detail |
|---|---|
| Instrument | Total return swaps: banks bought the shares and passed the returns to Archegos for a fee. See [Swaps Explained](https://learn.tradelabsai.com/bonds-credit/swaps-explained/) |
| Leverage | Estimated at several times its capital, with gross exposure reported at over $100 billion at its peak |
| Concentration | Huge stakes in a handful of stocks, including ViacomCBS, Discovery and several Chinese technology companies. See [Concentration Risk](https://learn.tradelabsai.com/risk/concentration-risk/) |
| Secrecy | Because the banks legally owned the shares, Archegos did not need to disclose large stakes publicly, and each bank saw only its own exposure. See [Position Limits and Regulatory Reporting](https://learn.tradelabsai.com/industry/position-limits/) |

## The collapse

| Date (2021) | Event |
|---|---|
| 22 March | ViacomCBS announces a share sale to raise about $3 billion; its stock starts falling from record highs |
| 23 to 25 March | The stock keeps falling; Archegos faces margin calls it cannot meet |
| 25 March | Banks meet with Archegos to discuss an orderly wind down; no agreement holds |
| 26 March | Some banks sell large blocks of Archegos related shares; prices of affected stocks fall sharply |
| Following days | Banks that sold later or slowly report large losses |

**Example: First mover advantage in a fire sale**
Several banks each held billions of dollars of shares hedging their swaps with Archegos. Once Archegos defaulted, each bank's best move was to sell before the others. Banks that sold large blocks early on Friday 26 March got out at higher prices and reported small or no losses. Banks that waited sold into a falling market. Reported losses included about $5.5 billion at Credit Suisse and about $2.9 billion at Nomura, while others reported much smaller amounts. Total bank losses exceeded $10 billion. The same assets, but very different outcomes depending on speed. See [Liquidity Risk](https://learn.tradelabsai.com/portfolio/liquidity-risk/).

## Why risk controls failed

| Failure | Explanation |
|---|---|
| Fragmented visibility | No single bank knew Archegos's total positions |
| Weak margin terms | Some banks set low margin or allowed it to fall as positions grew. See [Margin Financing](https://learn.tradelabsai.com/industry/margin-financing/) |
| Concentration ignored | Huge exposure to a few stocks with limited liquidity |
| Client profile | Hwang had a past regulatory settlement; some banks still extended substantial credit |
| Profitable client | Large fees encouraged banks to accommodate the business. See [Prime Brokerage](https://learn.tradelabsai.com/industry/prime-brokerage/) |

## Aftermath

- **Credit Suisse** commissioned an independent report that found serious failures in risk management and oversight. The bank's problems, including Archegos and other scandals, contributed to its emergency takeover by UBS in March 2023.
- **Bill Hwang** was charged with fraud and racketeering, accused of manipulating stock prices and misleading banks. He was convicted in July 2024 and sentenced to 18 years in prison in November 2024.
- **Regulators** proposed and adopted more disclosure for large security based swap positions and closer scrutiny of prime brokerage risk.

## Lessons

1. **Leverage hidden in derivatives is still leverage.** See [Leverage](https://learn.tradelabsai.com/markets/leverage/).
2. **Concentrated positions in a few names** can unravel fast. See [Diversification](https://learn.tradelabsai.com/portfolio/diversification/).
3. **Counterparties need the full picture;** fragmented exposure hides total risk. See [Market, Credit and Counterparty Risk](https://learn.tradelabsai.com/portfolio/counterparty-risk/).
4. **In a fire sale, the first sellers suffer least.**
5. **Fees from a profitable client** can blind firms to risk.

## Frequently asked questions

### What was Archegos Capital?

The family office of Bill Hwang, which used total return swaps to build large, leveraged and concentrated stock positions before collapsing in March 2021.

### How did Archegos hide its positions?

Through total return swaps, where banks owned the shares, so Archegos did not have to disclose large stakes and each bank saw only part of its exposure.

### How much did banks lose from Archegos?

Total losses exceeded $10 billion, including about $5.5 billion at Credit Suisse and about $2.9 billion at Nomura.

Next, look at some of the most famous trades ever made in [Famous Trades in History](https://learn.tradelabsai.com/history/famous-trades-in-history/).

## Continue learning

- Next lesson: [Famous Trades in History](https://learn.tradelabsai.com/history/famous-trades-in-history/)
- Previous lesson: [Amaranth Advisors](https://learn.tradelabsai.com/history/amaranth-advisors/)
- Related: [Amaranth Advisors](https://learn.tradelabsai.com/history/amaranth-advisors/): In September 2006, hedge fund Amaranth Advisors lost about $6 billion on natural gas futures spreads. Learn the trades, why they failed and the risk lessons.
- Related: [Prime Brokerage](https://learn.tradelabsai.com/industry/prime-brokerage/): Prime brokers give hedge funds financing, stock lending, clearing, custody and reporting. Learn the services, how prime brokers earn money and the risks.
- Related: [Swaps Explained](https://learn.tradelabsai.com/bonds-credit/swaps-explained/): A swap exchanges one stream of cash flows for another. Learn the main types, from interest rate and currency swaps to credit, total return and commodity swaps.
- Related: [Concentration Risk](https://learn.tradelabsai.com/risk/concentration-risk/): Concentration risk is the danger of having too much exposure to one asset, sector or idea. Learn how it hides in portfolios, how to measure it and how to limit it.
- Related: [Market, Credit and Counterparty Risk](https://learn.tradelabsai.com/portfolio/counterparty-risk/): Learn the difference between market risk, credit risk and counterparty risk, how each is measured and managed, and real cases from Lehman Brothers to FTX.
- Related: [Margin Financing](https://learn.tradelabsai.com/industry/margin-financing/): Margin financing lets traders borrow from brokers against their holdings. Learn how margin loans are priced, collateral haircuts, margin calls and financing risks.