Bank of China’s US$1 billion hole from plunging oil shows how investors and banks alike are ill-prepared for risks of chasing after high returns

Every day since April 15, David Wang's smartphone would buzz with a message from Bank of China. May contracts for Crude Oil Treasure, a structured financial product that gives the layperson an easy entry into the complex world of oil trading, was expiring in a week, and investors must close or roll over their positions, said the automated message.Wang dismissed the warnings, and kept going long with 400,000 yuan (US$56,500) of his money at stake, believing that record-low oil prices offered him…

from South China Morning Post https://bit.ly/2zQl1sF