Just wait. I have a few friends at hedge funds that are very worried about their job security. The layoffs have already begun; I think we'll see some major hedge fund blowups within the next quarter.
Lots of hedge funds are commission based so if they lost money, they get nothing. With so much action in the market lately with such large swings, why not take some chances. Worst case you lose more, in which case it will effect you the same as liquidating would. Best case you make money.
Plus I imagine many managers are like gambling addicts. They see a lot of possible good gambles and want to take a shot. All the better with the current risk/reward formula.
In theory hedge funds are supposed to make money regardless of the market direction. In practice, they need liquidity to do so, which is why the current crisis should be pretty bad for them.
(When the counterparty goes bust, they've gotta collect what they're owed in bankruptcy court. Even if they were on the winning end of the trade, there's no guarantee that they'll get cash out of it. And in the meantime, the sudden disappearance of their trading partner means that some of their trades are likely dangerously unhedged.)
