when trades go bad

Some good stuff on the JP Morgan whale:

when basis trades blow up:

Whenever a trader has a large and known position, the market is almost certain to move violently against that trader — and that seems to be exactly what happened here. On the conference call, when asked what he should have been watching more closely, Dimon said “trading losses — and newspapers”. It wasn’t a joke. Once your positions become public knowledge, the market will smell blood.

a very detailed analysis ftalphaville.ft.com

Something which I found interesting in general terms (the curve trade):

The MarkitSERV data is beautiful in that it is daily and is available on a tenor-by-tenor basis. The bad news is that we have no idea how much of the activity is down to new trades versus terminations, since both types of event count as activity. It is also not available for tranches.


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