Leveraged bets on rally by hedge funds will magnify sell-offs

Financial Post – Hedge funds are borrowing record amounts of money to fund bets that stock markets will continue rising, creating conditions that could accelerate price falls if those leveraged positions are hurriedly closed.

Although global equities look set to advance for the remainder of the year, nervousness about the strength of China’s economy and the U.S. Federal Reserve’s plans to scale back its stimulus program could mean a rocky ride for markets.

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