I think those guys who lost real BIG, like Hunter, Leeson, and the two chinese and japanese metal traders ( yes, the chinese one who disappeared without even closing his copper or something 1 billion loss position ). Why are they still holding such large positions? The interest in having large assets is that you can diversify a lot. What for do they bet a big part of their assets on one single idea? When my account grows, I don't trade one more future, I add a new system on a new market. That's how you get consistent. When investing in hedge funds, we have to know how they are trading and invest only in large diversified automatized quantitative or arbitrage funds.
So you completely dismiss out of hand that there could be market manipulation in order to get more voters for midterm? I am not saying that I believe in it, but will definitely consider such possibility. redduke
Making a rookie mistake that *every* piker, let alone professional trader, is aware of; when you are managing 9 billion of other people's money...sorry but that's total cluelessness at best, and criminal negligence and fraud at worst. If you tell investors you have risk control, and then trade like that - then you flat out lied to them.
Amaranth might not be the only firm that lost money. Think about where this might lead. Could this become another Long Term Capital Management (LTCM) type event? SP500 is near the high value for the year, could a bear phase follow that lasts about 3 months? I recall the LTCM event followed or accompanied a stock market selloff beginning about September 1998 and lasting until about December 1998. What markets to watch now?
First at all, how do the investors know whether a fund is really carrying out the daily trading activities it says? Q http://www.cftc.gov/opa/enf06/opa5226-06.htm As alleged in the complaint, the defendants accepted money from individual customers and placed the money in an account in the name of King Investments (the Corporate Account). After receiving money from individual customers, the complaint alleges that the defendants did not invest the money in commodity futures trading, but left the money in the Corporate Account where King could access it for his personal use on items including his home mortgage and health care expenses. UQ
How does this scenario sound? Panicky fund executives everywhere are looking at trader positions for big exposure to natural gas. Positions are being reduced not for trading reasons but for political / hysteria reasons. Natural Gas contracts get sold and traders do not buy much gas because it is a tough sell to management. Prices fall for a while, become "oversold" then October begins, New York city gets a cold spell and needs heat. Then gas price rises a lot because people realize winter is a real thing that happens to places like New York.
***Important*** I know without a shadow of a doubt when oil is going down. I start receiving phone calls from brokers trying to sell me on oil and what a great buy it is. Every single time I get the call oil drops significantly within a week.