Bank/Hedge Fund Ties Dealt Blow By Dollar/Yen Spec Trades

METHODS & REGULATIONS

NEW YORK--Hedge funds attempted to salvage their lucrative trading ties with broker-dealers following the Long-Term Capital Management (LTCM) debacle, with claims that LTCM's leverage levels were an industry anomaly. What remains to be seen is how hedge funds will now explain the mounting losses from the industry's wide spread yen carry positions--a short-term speculative trading strategy--on dollar/yen volatility.

Hedge funds have been trading in yen carry instruments with broker-dealers in

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