EPISODE · Mar 27, 2026 · 16 MIN
LTCM Episode 6: Why LTCM Lost $550M in One Day | The Smartest Investors Got This Wrong
from The Saucetown Investor Podcast · host Matt Cox
In August 1998, Long-Term Capital Management faced a major financial crisis, losing $550 million in one day and nearly half its capital within weeks. This episode details how widening spreads and adverse leverage trading made the LTCM collapse unavoidable. Wall Street recognized the fund's systemic risk, shifting the narrative from a hedge fund problem to a broader market concern, and demonstrating critical lessons in risk management. Watch the full podcast episode to hear the deeper breakdown.
What this episode covers
In August 1998, Long-Term Capital Management faced a major financial crisis, losing $550 million in one day and nearly half its capital within weeks. This episode details how widening spreads and adverse leverage trading made the LTCM collapse unavoidable. Wall Street recognized the fund's systemic risk, shifting the narrative from a hedge fund problem to a broader market concern, and demonstrating critical lessons in risk management. Watch the full podcast episode to hear the deeper breakdown.
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LTCM Episode 6: Why LTCM Lost $550M in One Day | The Smartest Investors Got This Wrong
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