Hedge Funds Got Caught Long and Wrong Before Stock Slump: Chart

(Bloomberg) -- In a moment of bad market timing, hedge funds had increased their bullish bets on U.S. stocks to the highest since February, and second-highest in five years, just before last week’s sell-off. Speculative net long positions on S&P 500 Index e-mini futures had risen for the four consecutive weeks to Oct. 9, according to the latest data from the Commodity Futures Trading Commission. A rush to close those positions may have exacerbated the selling pressure in equities, which saw the U.S. benchmark gauge slump more than 5 percent in the following two days.

To contact the reporter on this story: Cormac Mullen in Tokyo at cmullen9@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Matt Turner, Adam Haigh

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