This downward spiral may have been exacerbated by Europe's efforts to cut the value of Greek sovereign debt without triggering a payout on credit-default-swap contracts.
Fund firms also are asking regulators to proceed with caution when it comes to timely exposure for the price and value of swapcontracts, another regulatory goal.
But they are happier with the government's proposals on derivatives, under which dealers will be able to continue peddling customised swapcontracts away from exchanges, albeit with a higher capital charge.
Producers cut gross longs and added gross shorts, raising their net short position, while swap dealers lowered their net long position by cutting gross longs and adding gross shorts contracts.