The Big Take
The Hedge Fund Traders Dominating a Massive Bet on Bonds
A small bunch of hedge fund traders dominates the massive basis trade. They’ve made billions for their firms — and alarmed financial supervisors.
Illustration by Madison Ketcham
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Jonathan Hoffman, John Bonello and Jonathan Tipermas share more than just similar first names. They’re the driving force behind a gigantic wager on government debt that’s been giving regulators sleepless nights.
They and their teams are top players in the “basis trade,” a bet by a few of the world’s biggest hedge funds that profits from the tiny price gaps between Treasuries and derivatives known as futures, people active in the market say. That makes them some of the most important individuals in finance today.