JPMorgan Boosted Derivatives Bets Eightfold in First Quarter

JPMorgan Chase & Co. (JPM) increased bets on credit derivatives on investment-grade debt eightfold in the first quarter, the period when the bank says it built trading positions that have produced at least $2 billion of losses.

JPMorgan had sold $83.6 billion more of the derivatives than it bought as of March 31, according to a Federal Reserve report dated May 17. That compares with a $10.7 billion difference as of Dec. 31, according to an earlier report. The reports don’t provide details on specific trades or bank units that contributed to the positions.

The latest report provides a glimpse of New York-based JPMorgan’s total derivatives-trading at the end of March, more than a month before the bank disclosed the trading loss. Reuters reported on the Fed data earlier today.

While the bank had a $101.3 billion position on derivatives expiring more than five years from now, it had a negative $53.8 billion position on derivatives maturing within one year, according to the latest Fed report. JPMorgan had a $35.1 billion position in derivatives maturing between one and five years as of March 31.

To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net or @liqquidity on Twitter; Yalman Onaran in New York at yonaran@bloomberg.net or @yalman_bn on Twitter

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.

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