Interesting. Would you know roughly what percentage was left in the fund and whether this might have been part of his compensation agreement?
Probably there's a fundamental problem with Hunter's trading model/ strategy. Q This week's implosion was not the first for Hunter, says Kuntz. "He had a previous blowup at Deutsche Bank that the CEO of Amaranth told us they were quite aware of when they hired him. They said they ran the checks and he completely checked out," Kuntz says. "They prided themselves on their risk management." UQ
Sorry but stops don't work when you have positions that are much BIGGER than the market can handle because of illiquidity.
I haven't a clue. I was told this by a former Amaranth investor. I doubt it was contractual, however. Amaranth Funds are trading on hedgebay.com The bids are rising a bit now that Citadel has agreed to buy the energy portfolio. Ken Griffin has got some balls.
And I'm sure their entry into that giant trade had some play in moving the markets in their direction. Thats probably why these season changing months' spreads have been SOOO wide.
Once the market knows you are in too deep on a trade, they won't let you escape. Their liquidation probably marked the low in Natgas.
Some guy was the teevee this morning saying that the kid put on a huge time spread (it wasn't a directional play) and word got out on the street. So naturally all those other traders wanted to "help" him.