Wall Street's New Toys Are Costing It Plenty

Hedging hypervolatile securities isn't easy. Just ask Salomon

When Salomon Inc. announced on Mar. 4 it had lost $250 million from trading, rivals wondered how such an astute dealer could get hit so hard--with rates falling and bonds surging. "What in God's name could you do in two months to lose a quarter billion?" said one.

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