Wall Street’s Worst ‘Doublespeak’—The Yield Enhancement Strategy

Wall Street is notorious for saying one thing to investors and meaning something else. It’s called “doublespeak,” language that deliberately obscures, disguises or distorts the meaning of words. The term was coined after the great British writer George Orwell used the term “doublethink” to describe a reality that was completely distorted, where down was up, freedom equaled slavery and war was really peace.  Meet Wall Street’s version of doublespeak, the UBS Yield Enhancement Strategy, or YES. UBS pitched YES as a low risk strategy to augment yield on conservative portfolios. The yield was supposed to be generated through a so called “Iron Condor” options trading strategy. The strategy entailed the sale of options on the S&P 500 Index, which purportedly had limited or capped upside and downside exposure. UBS solicited clients to dedicate a portion of their existing accounts as collateral for the…

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