Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Hedge Fund loses billions betting on Natural Gas Futures

Companies / Natural Gas Sep 22, 2006 - 08:00 PM GMT

By: Shahla_Walayat

Companies

The financial media is buzzing about the reports of "enormous losses" suffered by Amaranth Advisors, a Connecticut hedge fund that reported it had lost in excess of $4 billion in the collapse of natural gas prices during 2006.

Specifically, the fund claims that its losses were due to bets that the spread between the March and April 2007 natural gas contracts would widen. That spread, in fact, did not widen but instead grew tighter as natural gas prices fell. While the fund allegedly lost money on a number of natural gas–related bets, The New York Times is reporting that the spread bet was the most costly.


Rush for the Exit

Investors who put money into the Amaranth Multi-Strategy fund after 1st of Feb., had to agree to a 25-month lockup,. Investors who got in before that could redeem on Jan. 31, April 30, July 31 and Oct. 31 each year, provided they gave 45 days' written notice. But if investors representing more than 7.5% of the fund's assets asked to redeem, Amaranth could put up a so-called gate, halting all redemptions. A 2.5% redemption fee could also be levied in such a situation. As likely more than 7.5% has been requested, which now gives the firm the right to delay redemptions until it is able to return investor monies.

As for Natural Gas Futures

The futures peaked at over $15 and have recently traded to below $5, unwinding all of the gains observed during 2006. At this point in time given similar overhanging positions amongst other large speculators, the bears continue to have the upper hand.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in