Hedge funds have been deleveraging at record “extreme levels” during the coronavirus-induced market turbulence. Many, confronted with an increase in margin calls and redemptions, are reducing their market exposure and trading bets and paying off debts to banks.

A Morgan Stanley prime brokerage report to clients, sent out earlier this week and seen by Financial News, described the recent crushing moves. It said: “The degrossing [a Wall Street term for deleveraging] last week was observed in all regions and seen first by the quants and multi-strat/macro funds...with the equity long/short funds joining in by Wednesday.”