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Archegos Capital Collapse

Archegos Capital Management collapsed in March 2021 after sharp declines in several concentrated equity positions triggered margin calls from its prime brokers. The family office used derivatives such as total return swaps, allowing large economic exposures to be built through multiple counterparties. When the underlying stocks fell, lenders demanded additional collateral. Archegos could not meet the calls, and banks began liquidating positions. The mechanism formed a feedback loop: position declines → margin calls → forced selling → further price pressure → larger losses The case illustrates the interaction between leverage, concentration, counterparty exposure, and forced liquidation. The central risk question is not only how much one position can lose, but how large total exposure becomes under stress.