Hedge funds rush to liquidate

Hedge funds rush to liquidate

Monday’s carnage saw liquid US stocks held by hedge funds sold off more than the wider market, indicating that a rush to hedge positions exacerbated the collapse, the WSJ reports. David Tepper sold most of his position in Bank of America as US financials bore the brunt of the selling. At the same time, the selling of the biggest names might be a sign that margin calls are also sweeping the hedge fund industry, says John Hempton. The argument is strengthened by the run-up seen in margin debt at the NYSE before July, says Distressed Debt Investing.