Citadel Investment Group LLC and JPMorgan Chase & Co. agreed to take over energy-trading positions from Amaranth Advisors LLC, the hedge fund whose wrong-way bets lost about $4.6 billion this month, two people with knowledge of the decision said.

Separately, Citigroup Inc., the biggest American bank by assets, is in talks to buy a stake in Greenwich, Connecticut-based Amaranth, two people involved in those discussions said.

Amaranth, which had $9.5 billion of assets in August, was forced to unload the trades after swings in natural-gas prices last week turned it into the biggest hedge fund meltdown since Long-Term Capital Management LP’s 1998 collapse. Transferring the bets would stem Amaranth’s losses, freeing the firm to seek the cash infusion it may need to stay in business.

“Normally, you would want to try to manage yourself out and improve it, stop the bleeding and then sell it in three months or something, once the crisis has passed,” the former general counsel for Enron Corp.’s trading unit, who’s now a Houston-based energy consultant and managing partner of ETS Energy Partners Ltd., Mark Haedicke, said. “To sell it in the middle of a crisis to me indicates a greater disaster.”

Chicago-based Citadel, the $12 billion hedge fund group led by Kenneth Griffin, and JPMorgan, the No. 3 American bank by assets, will assume the portfolio’s risk of further losses.

Mr. Griffin pushed into energy trading in 2001 as Enron’s implosion drove other firms out of the market.As of early 2005,the firm had a 70-member team trading power and natural gas. New York-based JPMorgan is building a power and gas-trading business around George “Beau” Taylor, whom it hired from Morgan Stanley last year.

Details on how JPMorgan and Citadel would manage the positions weren’t immediately available.

Amaranth told investors in a letter earlier today that it reached a deal to transfer all its energy trades to an unnamed third party. CNBC reported later that Citadel and JPMorgan agreed to take over the bets.

Officials at Citadel, JPMorgan, New York-based Citigroup and Amaranth declined to comment before a public announcement.

“Potentially, they bought at a very good price,” a finance professor at Boston University and former risk manager of electricity trader Citizens Power, Mark Williams, said. “If they have longer time horizon and they can withstand the volatility and the short-term fluctuations, they then have a good chance of making some serious cash.”