“(Reuters) – It’s the biggest parlor game on Wall Street: Estimating how large JPMorgan Chase & Co’s (JPM.N) trading loss will be from a hedging strategy that went wrong.
The biggest U.S. bank by assets has already disclosed $2 billion of paper losses, and Chief Executive Jamie Dimon said it could lose another $1 billion or more.
The losses will grow, some traders say, because it appears JPMorgan has only sold a small portion of its position, ”
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Why don’t they just form a compliment index, by shorting whatever long products are in the index / going long whatever short products are in the index?
They would lose from decay and from any interest needed to borrow the components, but at least they’d be home free from jackass traders trying to press the hot blade to their knecks.