(CNBC) The e-mail arrived in clients’ inboxes shortly after the market opened on Tuesday: “LJM strategies have suffered significant losses.” LJM Partners, a Chicago-based hedge fund with about half a billion dollars in assets, pinpointed the damage on spiking volatility, a trade that has claimed more than one scalp in the last few trading days. Their mutual fund, known as the LJM Preservation and Growth Fund, collapsed by 82 percent over the last week and was closed to new capital on Wednesday.
Fund Crashes After Wrong-Way Volatility Trade
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