Allianz Global Investors is liquidating two hedge funds after they took heavy losses in recent weeks on stock-options trades.

An Allianz Global Investors spokesman said the two funds, Structured Alpha 1000 and Structured Alpha 1000 Plus, had been net buyers of puts, or options giving the holder the right to sell an asset at a predetermined price in the future. The puts were designed to hedge against losses the funds might endure from other positions should the market decline.