Phillips Lost $140 Million in April Trading Tudor Bonds

Alexander Phillips, a trader at Tudor Investment Corp., experienced significant losses of approximately $140 million from April through early this week, as financial markets were shaken by President Donald Trump’s aggressive tariff announcements.

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These tariffs triggered widespread volatility, hitting U.S. Treasuries and other major financial assets, and ultimately erased Phillips’ gains from earlier in 2025. As of this week, his trading book showed a year-to-date loss of about $80 million, according to individuals familiar with the situation, who spoke anonymously due to the private nature of the details.

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Despite the losses, Phillips remains employed at Tudor Investment Corp. and is actively working to recover. The firm, which oversees $16 billion in assets, downplayed the situation in the context of its overall portfolio. A Tudor representative said in a statement, “While markets have been volatile, Alex Phillips has not been stopped out and continues to actively trade and manage his portfolio.”

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Although Phillips’ April losses may be modest relative to the firm’s total assets under management, the speed and scale of the downturn underscores the difficulty many traders are having with the market's erratic behavior. Trump’s abrupt announcement of sweeping tariffs last week was aimed at fundamentally reshaping global trade, but it sent shockwaves across financial markets.

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Even the U.S. Treasury market — typically viewed as a safe haven during times of turmoil — was affected, adding to the instability.

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As Treasury yields surged, market participants speculated about the possible causes behind the selloff. Theories ranged from foreign central banks offloading U.S. debt as retaliation, to hedge funds being forced to exit leveraged trades. These dynamics created an unusually turbulent environment for fixed-income traders like Phillips.

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It's not entirely clear what specific trades led to Phillips' losses. However, he is known to specialize in highly leveraged strategies, particularly bond basis trades. These trades involve exploiting the price differences between cash Treasuries and Treasury futures — a strategy that has grown increasingly popular and is viewed as a potential risk in times of market stress.

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In bond basis trades, hedge funds borrow heavily — often at leverage ratios of 50 to 100 times their capital — to benefit from very small price discrepancies between two types of Treasury instruments. While typically profitable under normal conditions, these trades can unravel quickly when volatility spikes or liquidity dries up, causing rapid and substantial losses.

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This exact scenario has raised concerns among regulators, with some recalling the market disruptions of March 2020, when the Federal Reserve had to intervene to stabilize the Treasury market.

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Recent estimates suggest that around $1 trillion is currently tied up in bond basis trades, double the volume seen five years ago. This massive scale has amplified the systemic risks associated with the strategy, and Phillips’ situation highlights the fragility of these positions in volatile environments.

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Prior to joining Tudor, Phillips held positions at ExodusPoint Capital Management and Millennium Management — both hedge funds known for their aggressive involvement in basis trades. At these firms, he worked under the guidance of experienced traders such as Jonathan Hoffman and John Bonello, who are recognized leaders in this complex niche of bond trading.

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The past week’s market conditions have proven exceptionally challenging for traders across the industry. Many have struggled to manage portfolios amid the sharp swings in bond yields and the shifting policy signals coming from Washington. The turmoil has triggered a wider reassessment of risk exposure, with numerous traders being forced to reduce positions or unwind leveraged bets.

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While Phillips’ performance setback is notable, it also serves as a reflection of the broader stress facing the hedge fund community in 2025. Sudden policy announcements and rapidly shifting investor sentiment have made it increasingly difficult to maintain stable positions, even for highly experienced traders operating at top-tier firms.

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Tudor Investment Corp., founded by billionaire Paul Tudor Jones, is one of the most well-known names in the hedge fund industry. The firm has navigated decades of market cycles and crises, and its long-term success has been built on its ability to adapt to changing conditions. Phillips’ losses, while significant, are not expected to fundamentally alter the firm’s strategy or outlook — though they do highlight the elevated risks currently facing even the most sophisticated players in the bond market.

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