Company: GLRE
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001385613-25-000007
Chunk: 651

Company: GREENLIGHT CAPITAL RE, LTD.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 1A
Chunk 651
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 financial intermediaries and guarantors may default on their obligations to us and/or Solasglas due to bankruptcy, insolvency, lack of liquidity, adverse economic conditions, operational failure, fraud or other reasons. Such 

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defaults could have a significant and negative effect on us and/or Solasglas and, correspondingly, our investment portfolio and our results of operations, financial condition, and cash flows.  

Solasglas effectuates short sales that subject our capital accounts to material and adverse loss potential.

Solasglas enters into transactions in which it sells a security it does not own, which we refer to as a short sale, in anticipation of a decline in the market value of the security. Short sales subject our capital accounts in Solasglas to material and adverse loss potential since the market price of securities sold short may continuously increase. Short sales may result in a substantial loss and may expose us to a loss exceeding the original amount invested.

Short-sale transactions have been subject to increased regulatory scrutiny and Solasglas’ ability to execute a short selling strategy may be materially and adversely impacted by new rules, interpretations, prohibitions, and restrictions adopted in response to adverse market events.

As a result, Solasglas may be unable to effectively pursue a short-selling strategy which may adversely affect Solasglas’ investment returns, and correspondingly, our investment returns. 

Solasglas may trade on margin and use other forms of financial leverage, which may increase the risk of our investment portfolio.

Our investment guidelines allow Solasglas to trade on margin and use other forms of financial leverage. Solasglas relies on prime brokers to extend leverage and such prime brokers may elect not to provide leverage to Solasglas. Fluctuations in the market value of our investment in Solasglas could have a disproportionately large effect in relation to our capital. Any event which may adversely affect the value of positions Solasglas holds could materially and adversely affect the net asset value of our investment portfolio and our results of operations.

Solasglas may transact in derivatives trading, which may increase the risks associated with our investment portfolio.

Derivative instruments, or derivatives, include futures, options, swaps, structured securities, and other instruments and contracts that derive their value from one or more underlying securities, financial benchmarks, currencies, commodities, or indices. There are a number of risks associated with derivatives trading. Because many derivatives are leveraged, a relatively small adverse market movement may result in a substantial loss and may expose us to a loss exceeding the original amount invested. Deriv