Great article. I imagine @JohnArnoldFndtn enjoyed it as well
In a couple weeks we’ll celebrate the 15 year anniversary of Amaranth’s blow up in the natural gas markets. This week’s free post recaps their incredible story & its impact on market structure to this day. Thanks for reading!https://frontmonth.substack.com/p/amaranthology
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Always enjoyed this one from the ICE: 'The most violent shifts for natural gas occur in the spread between March and April.... This spread has been dubbed “the widowmaker” because it has brought ruin to more than one trader.' https://www.theice.com/publicdocs/ICE_NatGas_Brochure.pdf …
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Nothing like a great Front Month piece to start the day
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After Amaranth, BH used to mark his time spreads by sloppily buying straddle swaps into he close every single day. It was a food fight to get on those tickets to close out the time spreads you legged that day to front run. Eventually mm's were hitting their own faded bids Few
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kinda like bidding from upstairs for straddles in the N225 on Simex with other mms who then hit your bid right before Nick sold the straddle lower
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People who hit a grand slam then blow up strangely make a lot more money than those who keep winning with singles and doubles without blowing up.
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I remember a line from an email I received on this at the time. Something to the effect of: “He wasn’t just long, he was Hunt bothers long”
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$14/mmbtu is no longer the highest price ever in the US but otherwise great article... reads a lot like Hedge Hogs.
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Great recap, I remember this well. Kathy Burton and I broke the Amaranth loss story on
@business and it was the most-read story ever on the terminal for a long time. Fun fact: the trades that blew up MotherRock blew up Amaranth, which had bought the MR trades -
One other thing — the joke back then was “if you’re going to lose $6.5 billion, start with $8 billion”
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