The world continues to wait for more details on what caused the surprising $2 billion trading loss at J.P. Morgan.As far as we know, the loss occured through J.P. Morgan’s Chief Investment Office under the watch of trader Bruno Iksil.
But who was on the other side of that trade?
According to a new report from the The New York Post’s Michelle Celarier, the man on the other side was Boaz Weinstein, head of Saba Capital Management and former proprietary trader at Deutsche Bank. From the Post:
A 38-year-old hotshot trader and chess master named Boaz Weinstein was the driving force behind the harpooning of the “London Whale,” hedge-fund industry sources told The Post.
In February, Weinstein had recommended buying the Investment Grade Series 9 10-Year Index CDS, which is reportedly the same security Iksil was short. “They are very attractive” and can be bought at a “very good discount,” said Weinstein according to Business Insider’s Julia La Roche.
More from the Post:
It appears the index was so cheap because Iksil was buying it to make a big short bet. Weinstein, whose Saba overseas $5.5 billion in assets, decided to go long and said he bought the index a few days before the conference at around 120 basis points.
For a while, Weinstein’s genius trade wasn’t working out. The IG9 Index continued to sink under the weight of the Whale’s buys — hitting a low of 105 on March 21.
But two weeks later, on April 3, reports surfaced about the Whale’s outsize positions and the tide started to turn.
The price spiked to 130 as traders piled on…