In 2006, ICE and CME natural gas markets imploded when an elephant trader lost $4.4 billion in 3 weeks.
This is the story of Amaranth Advisors
Show this thread
-
CME, seeing the risk, repeatedly told Amaranth to cut their position size – they were just too big. In response, Amaranth moved their positions from CME onto ICE, which at the time was not a regulated exchange, and not under the full purview of the CFTC.
Show this thread
In September, nat gas prices surprisingly dropped as supply outpaced expectations. Amaranth’s positions were too big to exit, and the fund took a bloodbath:pic.twitter.com/3Si4mbco9w
-
-
In late September after $4 billion+ of losses, Amaranth sold their gas positions to Citadel and JP Morgan and liquidated the fund. The loss remains one of the biggest in history. Full timeline can be seen below:pic.twitter.com/WmEthzG72H
Show this thread -
Sources: https://poseidon01.ssrn.com/delivery.php?ID=235082105031025068098085025027114076015049061009035090102084091090029000121070086022055098003047041017008075098107001075108001119049011087044101069064072101010067028033018101064080030025064075122121095125064003030071079069097121112028105120111013120&EXT=pdf … https://www.hsgac.senate.gov/imo/media/doc/REPORTExcessiveSpeculationintheNaturalGasMarket.pdf …
Show this thread
End of conversation
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.