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Chase pain not over yet as losses grow

JPMorgan Chase has acknowledged losing at least $2 billion on a series of risky trades, and now that sea of red ink appears to be rising.

According to the New York Times Dealbook, which cited anonymous insiders, Chase has already lost at least another $1 billion since bank CEO Jamie Dimon disclosed what he described as a "flawed" hedging strategy a week ago.

Chief investment officer Ina Drew already has resigned over the losses, and the bank reportedly has dimissed the main trader responsible for executive the strategy, dubbed the "London Whale" in financial markets. Now sharks are moving in to take advantage of the bank's vulnerability.

“This is a very hard trade to get out of because it’s so big," an anonymous trader told the Times.

JPMorgan shares, which have shed nearly 20 percent of their value since the losses were disclosed, were down 3 percent at $34.40 Thursday

Some lawmakers and other industry observers have questioned whether the trades were truly "hedges" intended to protect the bank from risk or were simply risky bets intended to make a profit.

Banks regularly hedge against risk by making both positive and negative trades on the same products so that a loss on one side will be offset by a gain on the other. In theory, the timing overlaps so the hedge protects the value of the original position only while the bank holds that position.

In the case of the trades that led to Chase's multibillion dollar loss, the timing was skewed, with the different positions of a three-layer bet covering different time periods, according to the Wall Street Journal. The trades were also made on different indexes that don't track each other, an unusual decision that increases risk — but also provides the opportunity to make a profit.