Massive losses on derivatives trades at Geode Capital management has pushed the giant investment firm into closing down its hedge-fund business.Geode manages all of Fidelity Investments’ stock-index funds, and that operation accounts for most of the firm’s $720 billion in assets. But it has also provided an array of riskier, hedge-fund strategies to rich clients and institutions. Geode’s biggest private fund lost roughly $250 million after its bets on stock-market volatility turned sour last year. The fund dropped by some 36% by spring. The losses, and ensuing margin calls, forced the Geode Diversified Fund to liquidate other unrelated positions and led the fund’s largest investor, Fidelity itself, to withdraw its money, the people said. Geode closed down the fund and exited from its wider Absolute Return business offering clients hedge-fund-oriented investment to focus on index investing. The losses and closure of the hedge-fund-business haven’t been reported before.