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UBS VAR nearly doubles to hit decade high

Created at 10 Aug · 3:36 AM1 source↑ Market-relevant
IN SHORT

UBS's average daily value-at-risk (VAR) in the second quarter reached $21 million, a 90.9% increase from the prior quarter and the highest level since at least 2014. This surge in hedging activity occurred as equity markets navigated geopolitical turmoil.

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Key Numbers

$21 millionUBS average daily value-at-risk in Q2
90.9%Increase in VAR from previous quarter
$12 millionUBS average daily value-at-risk in Q1

Who's Involved

UBS
reported nearly doubled value-at-risk

↳ Why This Matters

The substantial increase in UBS's value-at-risk indicates heightened hedging activity and potentially greater perceived risk within the financial markets, even as equity markets showed resilience.

Key facts

  • UBS's average daily value-at-risk (VAR) increased to $21 million in Q2.
  • This represents a 90.9% increase from the $12 million VAR reported in Q1.
  • The Q2 VAR is the highest since at least 2014.
  • The increase in hedging activity occurred amid equity market volatility related to geopolitical events.

UBS's average daily value-at-risk (VAR) surged to $21 million in the second quarter, marking a decade high and a significant increase from the previous quarter. The figure was up 90.9% from $12 million in the first quarter, surpassing the previous decade's second-highest watermark of $17 million. This rise in hedging activity coincided with equity markets navigating geopolitical turmoil, including events in Iran.

Frequently asked questions

Value-at-risk (VAR) is a statistical measure used to quantify the level of financial risk within a firm or investment portfolio over a specific time frame. It estimates the maximum potential loss that could be incurred under normal market conditions.

The article suggests the increase in VAR is linked to heightened hedging activity as equity markets navigated geopolitical turmoil, implying increased perceived risk.

Reaching the highest VAR level since at least 2014 suggests a level of market uncertainty or risk exposure not seen in a decade, despite the equity markets' ability to withstand recent geopolitical events.

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How It Developed

UBS's average daily value-at-risk (VAR) rose to $21 million in the second quarter.
This figure represents a 90.9% increase from the previous quarter's $12 million.
The second-quarter VAR is the highest level recorded since at least 2014.

Sources

T1
UBS VAR nearly doubles to hit decade highRisk.net

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