Boaz Weinstein Reveals the Trade That Led to the London Whale

Boaz Weinstein thinks about markets differently than most credit traders.

The 49-year-old founder of hedge fund Saba Capital Management spent his early career at Deutsche Bank AG, when credit-default swaps were just hitting the market. Over the next decade, he made a lot of money for the German lender trading CDS—effectively insurance against a corporate default—and the instruments remain a big part of his portfolio.

Weinstein

Photographer: Chris Buck for Bloomberg Markets

From this wonky part of the market, Weinstein has made his share of headlines. Just months before his planned spinout of Saba in 2009, he lost $1.8 billion in the wake of Lehman ...