Who is best trader? WHY? What strategy do you guess they use or used?

Discussion in 'Trading' started by jaytrader100, Aug 8, 2008.

  1. John Arnold has the best performance of any trader i have ever heard of..ever.

    How many years did it take most wall street guys to make a billion for themselves? I do not know the avertage but it sure as hell wasn't 5 years.. this guy was analyzing Natural Gas for enron.. probably making 50 K a year and watched teh traders take his insight and make big bucks.. so he trades and becomes the highest paid trader at Enron. Starts a hedge fund .. meets makes solid enormous returns and gains massive equity from wealthy people.. then he makes a billion dollars (cash) by the way CASH!!! in a year.. thats 4 million per trading day!!!! he is not day trading but playing seasonal spreads in Natural Gas Futures and options .. not day trading.

    Anyway never had the pleasure to meet him, but from what i gather he is no wall street prick and is as down to earth as most average people. He wins my vote for best trader..ever!
  2. The cool thing about trading is its all on you. People try to project all kinds of reasons why the lost money, when the reason they lost money is because they gave it away. Same thing with profits. There are no limites too how much you can make or lose.
  3. johnny's not limited to just gas these days. times have changed
  4. What's his performance BTW ?
  5. bh_prop



    He manages to stay out of the press and just does his thing. Everyone has heard of legends like Tudor Jones and Boone Pickens but outside of the energy industry Mr. Arnold isn't that widely known.

  6. Renaissance Medallion Fund probably has the best long term record since 1986 using a lot of capital (>1 billion). They basically day trade liquid instruments using automated programs, grinding out returns. High intraday volatility helps their strategies and they are up again this year about 49%.

    The other Renaissance institutional fund has not done so well. It uses longer term investing and has performed pretty much in line with the average mutual fund.
  7. Just find this article...

    He seems to rely on the fundamentals and be remarkably accurate.

    It is so hard to understand why he can be so accurate as natural gas market is so wild.

    John Arnold tells it like it is

    The Senate's Permanent Committee on Investigations is having a hearing today, to be continued July 9, on the role of speculators in natural gas markets. It's based on the report the committee did looking into the collapse of hedge fund Amaranth last year.

    Among those expected to testify are Houston's own Vince Kaminski, a former risk management executive at Enron who is now a professor at Rice University's Jones School of Management.

    The report details the downfall of Amaranth and concludes there needs to be more oversight by the Commodities Futures Trading Commission of energy markets, particularly the over-the-counter markets.

    Late in the report there's an interesting section describing an e-mail between Amaranth's top trader at the time, Brian Hunter, and John Arnold, the head of Houston energy hedge fund Centaurus:

    By September 15, as Amaranth's natural gas positions continued to deteriorate and its cash position weakened considerably, Amaranth began to seek a counterparty to buy its energy book. One of the counterparties Amaranth approached was Centaurus. Late on Saturday, September 16, Amaranth's senior energy trader Brian Hunter asked John Arnold, Centaurus CEO, whether the hedge fund would like to make a bid for some of Amaranth's positions. Early the next morning, Mr. Arnold offered a bid after making the following observations:

    "I was not in the office on Friday but I understand you were selling h/j [March/April]. The market is now loaded up on recent, bad purchases that they will probably try to be spitting out on Monday if there is a lower opening given that spread has been in free fall. In my opinion, fundamentally, that spread is still a long way from fundamental value."

    "Over the past couple years the market has put a big risk premium into that spread yet it has paid out on expiry once in ten years. We'll be at all time high storage levels with mediocre s/d [supply and demand] and an el nino. Even though that spread has collapsed over the past 2 weeks, the only reason it's still $1 is because of your position. Historically, that spread would be well below $1 at this point given the scenario."

    Mr. Arnold gave Mr. Hunter two price quotes for the March/April spread: 45-60 cents for the March/April 2007 spread which had closed the previous trading day at $1.15; and $1.00-$1.20 for the March/April spread in 2008 and beyond, which had closed the previous day at between $2.10 and $2.20. Mr. Hunter declined Mr. Arnold's offer. Mr. Arnold's prediction of the behavior of these spreads, however, turned out to be remarkably accurate. On September 21, the last day of Amaranth's trading in the natural gas market, the March/April 2007 spread stood
    at 58 cents, and the March/April spreads for 2008 and beyond ranged from $1.18 to $1.25.

    After several days of frantic negotiations with several brokerages and banks, on
    September 20th, Amaranth formally sold its energy book to its clearing firm, JPMorgan Chase, and Citadel, another hedge fund. To meet its margin calls and satisfy client requests, Amaranth liquidated the remainder of its $8 billion portfolio.

    There was a study done based on trading data in 2002 and 2003 that says speculative traders, like hedge funds, aren't driving prices up. The mantra I regularly hear is that speculators are "price takers, not price makers." NYMEX has regularly made the same conclusion. But I wonder if the volume of speculative trading by banks and hedge funds has changed so much since 2002 and 2003 that those studies are no longer valid? What's your take?
  8. 350% this year on 2 billion never had a year below 175% or something like that
  9. market making for EOL gives u a lot of info about what your clients are up to..
  10. EOL was history years ago!!!! He is trading the financials on ice and nymex? How doe smarket making years ago on eol even matter? explain if you can?
    #10     Aug 9, 2008