Caribbean Plate a subduction zone, the Lesser Antilles subduction zone, where oceanic crust of the South American Plate is being subducted under the Caribbean Plate. Subduction forms the volcanic islands of the Lesser Antilles Volcanic Arc from the Virgin Islands in the north to the islands off the coast of Venezuela in the south. This boundary contains seventeen active volcanoes, most notably Soufriere Hills on Montserrat; Mount Pelée on Martinique; La Grande Soufrière on Guadeloupe; Soufrière Saint Vincent on Saint Vincent; and the submarine volcano Kick 'em Jenny which lies about 10 km north of Grenada. Large historical earthquakes in 1839 and
Long-Term Capital Management invested in other derivatives such as equity options. Under prevailing US tax laws, there was a different treatment of long-term capital gains, which were taxed at 20.0 percent, and income, which was taxed at 39.6 percent. The earnings for partners in a hedge fund was taxed at the higher rate applying to income, and LTCM applied its financial engineering expertise to legally transform income into capital gains. It did so by engaging in a transaction with UBS (Union Bank of Switzerland) that would defer foreign interest income for seven years, thereby being able to earn the more favourable capital gains