Not many of you aware of the incident that took place in the month of April 2012 Bloomberg and Wall street journal made the headlines JPMorgan Trader’s Positions Said to Distort Credit Indexes and ‘London Whale’ Rattles Debt Market.
Picking up from the CDX.NA.IG indices are composed of 125 North American corporate credits that are investment grade when the index begins trading understanding JP Morgan loss.Taking a position in the index allows traders to hedge or speculate. Going long means selling protection on the index in the expectation that the underlying company credits improve or at least do not default. Going short means buying protection on the index. The net notional value of the CDX.NA.IG.9 has surged from about $90bn at the start of the year to $150bn in April – indicating a big jump in trading. Continue reading “The Whale trade of JP Morgan in 2012”