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
-
-
Amaranth was a large successful multi-strategy hedge fund. In 2005, the fund and star trader Brian Hunter made $1 billion betting on natural gas futures.pic.twitter.com/uPIr6GXGVQ
1 reply 0 retweets 2 likesShow this thread -
In mid-2006, Hunter’s research led him to believe that nat gas prices were set to skyrocket as winter approached:pic.twitter.com/dtLpq3lBl9
1 reply 0 retweets 2 likesShow this thread -
Amaranth built massive long winter positions in nat gas on both ICE and CME. At one point, Amaranth’s net positions represented 50% - 100%+ of the market:pic.twitter.com/uMJSnvlLDf
1 reply 0 retweets 1 likeShow 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.
1 reply 0 retweets 0 likesShow 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
1 reply 0 retweets 0 likesShow this thread -
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
1 reply 0 retweets 2 likesShow this thread -
This Tweet is unavailable.
Do you know of any articles/papers on it? Id be interested in reading.
6:33 AM - 14 Aug 2020
0 replies
0 retweets
0 likes
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.