For hedge funds that could smell blood in the water, it seemed to be an opportunity to take on JPMorgan Chase and win.
It was, in fact, such a sweet trade that even another part of the bank couldn’t pass it up.
Even as a trader for JPMorgan in London was selling piles of insurance on corporate debt, figuring that the economy was on the upswing, a mutual fund elsewhere at the bank was taking the other side of the bet.
…The bank’s Strategic Income Opportunities Fund, which holds about $13 billion in client money, owns about $380 million worth of insurance identical to the kind the “London whale” was selling, according to regulatory filings and people with knowledge of the trade. It is unclear how much the fund made.