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This is bad, but $150M lost in the natural gas market is not the worst I've seen. There was Brian Hunter of Amaranth [1] fame that blew up a $9B hedge fund with
by hermitdev 8y ago
This is bad, but $150M lost in the natural gas market is not the worst I've seen. There was Brian Hunter of Amaranth [1] fame that blew up a $9B hedge fund with a bad NG trade. Amaranth had to liquidate assets for pennies on the dollar to cover the margin calls. Wikipedia is note entirely correct, here, though. It says that JP Morgan & Citadel bought the assets, but it was Citadel that bought them all at the end of the day. My understanding at the time was that JPM couldn't calculate in time the risk involved with the assets they were planning on buying.
[1] https://en.wikipedia.org/wiki/Brian_Hunter_(trader) https://en.wikipedia.org/wiki/Brian_Hunter_(trader)
- whatok 8y agoCentaurus/John Arnold was another party here. While they were not part of the liquidation they had ridiculous returns that year as a result of the Amaranth situation. The book Hedge Hogs is a good read on Amaranth. Dollar amount aside, I'd argue this is worse in some ways because it dealt with individual investors who are now figuring out how to fund margin calls.