Long-Term Capital Management (LTCM) was a hedge fund founded in 1994 by John Meriwether, a former Salomon Brothers trader, along with Nobel laureates Robert Merton and Myron Scholes. The fund used complex mathematical models to exploit small market inefficiencies through arbitrage strategies, leveraging huge positions—often exceeding 25 times its capital. Initially, LTCM delivered massive returns, earning over 40% in 1995 and 1996. However, in 1998, the Russian debt default triggered a global fi