> The anti stock is actually a great idea, I am surprised Wall Street doesn’t do this already to create synthetic longs
Wall Street already does do this (and basically anything else you can think of that “Wall Street doesn’t do”). There are (at least) two forms. Firstly an Equity Swap[1] and secondly a Total Return Swap[2] (which is just Wall Street’s Swiss army knife tool for synthetically being long/short the return on some asset or basket).
If you just want to long/short the price return (and don’t include dividends which are mentioned in TFA) then there are also contracts for difference (CFDs) where the parties swap the price return on an equity. When I was in this business those were usually used because of tax differences between capital gains and other types of tax.
[1] https://www.investopedia.com/terms/e/equityswap.asp refers to it as having an index on one side and a rate on the other side, but there’s no reason not to have a single stock rather than an equity index and we used to do these 15 years ago when I worked in equities
Edit to add: There are also “dividend swaps” where the parties just swap the dividend return on the asset if you only care about that stream. This is sometimes helpful matching investors who have tax or other structural problems with receiving dividends with others who just want a dividend income stream without the asset price risk.
They do, as do TR swaps. They may not be advantageous for tax reasons.
For example, at one point, trading equities via swaps carrier a tax benefit to the end user, at no significant cost to the bank arranging this. Lots of institutions used that for trading. But later, the tax advantage was lost, while banks were forced to treat these swaps as a proper credit liability, thus depleting the pool of available capital. So people stopped doing this.
This is about 10 years outdated so I'm not sure what status quo is, but as a hack, this definitely exists in the US.
Wall Street already does do this (and basically anything else you can think of that “Wall Street doesn’t do”). There are (at least) two forms. Firstly an Equity Swap[1] and secondly a Total Return Swap[2] (which is just Wall Street’s Swiss army knife tool for synthetically being long/short the return on some asset or basket).
If you just want to long/short the price return (and don’t include dividends which are mentioned in TFA) then there are also contracts for difference (CFDs) where the parties swap the price return on an equity. When I was in this business those were usually used because of tax differences between capital gains and other types of tax.
[1] https://www.investopedia.com/terms/e/equityswap.asp refers to it as having an index on one side and a rate on the other side, but there’s no reason not to have a single stock rather than an equity index and we used to do these 15 years ago when I worked in equities
[2] https://www.investopedia.com/terms/t/totalreturnswap.asp
Edit to add: There are also “dividend swaps” where the parties just swap the dividend return on the asset if you only care about that stream. This is sometimes helpful matching investors who have tax or other structural problems with receiving dividends with others who just want a dividend income stream without the asset price risk.