Accumulated junk

Investors suffered big losses from equity accumulator products early this year, and there may be more to come. Satyajit Das takes a look at how they wreaked such havoc

Equity bull markets breed a variety of esoteric products, while bear markets generally prove the undoing of some of these structures. Asian equity markets have corrected significantly in 2008 - the Shanghai Composite Index dropped by 54% and the Hang Seng Index by 26% between January 1 and August 21 - causing problems for investors who used 'accumulator' structures to buy 'cheap' shares. These structures have exacerbated the volatility of the underlying stocks. How did the problems start and pan