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Amaranth, the big hedge fund that lost billions in a single week, is out of the energy trading business.

The fund, which once managed $9 billion in assets, told investors Wednesday that it had sold "the entirety of our energy portfolio" a week after it lost $4 billion on a series of calamitous natural gas trades.

Market sources say Amaranth sold its energy portfolio to

J.P. Morgan Chase

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and Citadel, a big Chicago hedge fund.

Amaranth didn't comment on the sale. A J.P. Morgan rep didn't return a phone call. Citadel couldn't be reached for comment.

The sale of the energy trading group likely means the end of the road for Amaranth's nearly two dozen energy traders, including the group's head, Brian Hunter. The 32-year-old Hunter, once considered one of the hedge fund world's top traders, is believed to be responsible for the failed trading strategy that cut Amaranth's assets under management in half.

Speculation is growing on Wall Street that it's only a matter of time before Amaranth, which is based in Greenwich, Conn., closes up shop. Besides selling its energy portfolio, the hedge fund has been selling stocks and liquidating its holdings in dozens of so-called

blank-check companies.

Amaranth also operates two in-house brokerages: Amaranth Securities and Amaranth Global Securities. The two brokerages are used by the hedge fund to trade stocks and commodities, as well as to engage in securities lending. A person answering the phones at Amaranth says the brokerages are still in business.

In the aftermath of last year's Bayou hedge fund scandal, some on Wall Street said investors should be wary of hedge funds that use their own in-house brokers to process trades because it can be a way of increasing commission costs for the fund's investors.

But the truth is that many of the nation's largest hedge funds have ties to affiliated brokerages through which they either execute trades or borrow and lend stock in order to finance their activities. Some of those hedge funds include Citadel, HBK Investments, Millennium Partners and Ramius Capital.

The Bayou situation, of course, was a lot different from the one at Amaranth. Bayou collapsed because of massive fraud perpetrated by its managers. So far, there's no allegation of any wrongdoing at Amaranth -- just an allegation that the fund didn't engage in basic risk management.

Several hedge fund investors, none of whom wanted to be identified, says it's hard to see how Amaranth's founder Nicholas Maounis can raise additional money from investors in light of the fund's over-the-top trading. Additionally, current investors will likely be clamoring to redeem their money as soon the hedge fund's operating rules permit them.

Meanwhile, the list of Amaranth investors looking at the prospect of taking a steep loss in the wake of the hedge fund's demise keeps growing.

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Some of the big Wall Street firms with investments in Amaranth are

Goldman Sachs

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Morgan Stanley

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Credit Suisse



Bank of New York

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Deutsche Bank

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. Other investors include Mercantile Capital and the San Diego County Employees Retirement Association.