Allianz Global Investors has closed down two hedge funds after they took heavy losses on stock-options trades after the market sell-off in recent weeks.
The two funds, Structured Alpha 1000 and Structured Alpha 1000 Plus, had been net buyers of put options giving the holder the right to sell an asset at a predetermined price in the future. The put options were designed to hedge against losses the funds might endure from other positions should the market decline, but the pace of the sell-off had a ‘particularly large impact on the options positions held by Structured Alpha funds – particularly the two highest target alpha private stra
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