6) It also complicates risk management. While your banks can margin call you, you can't then margin call clients you've offered these terms to – exacerbating the threat of a liquidity mismatch.

5) Yet Argentex was among firms pursuing zero-zero lines with some of its corporate customers, declining to ask them for either an initial deposit of margin or so-called variation margin in response to how the trades fared, the people said. That helped them attract clients.

4) As the dollar slumped this month, Argentex began facing margin calls from these banks. That's not unusual, and typically an FX brokerage could then demand similar levels of margin from its own clients to protect itself. bloomberg.com/news/articles/…

3) Argentex acts as a middleman between corporates and global banks. It entered into derivatives agreements with these banks, agreeing to post collateral — or margin — for its trades. This is a buffer against potential losses that banks can seize and sell if bets begin to sour.

2) Argentex built its name offering staid hedging strategies to corporates looking to fortify their balance sheets against the vagaries of the $7.5-trillion-a-day foreign-exchange market. Recently it had been amassing US dollar trades for clients: bloomberg.com/news/articles/…