How do you lose $5 billion in one week?
- Thread starter OddTrader
- Start date
Talk about a Positive Expectation trade!!!
Boyd Erman, Financial Post
Published: Tuesday, March 28, 2006
"Canada's top-earning trader doesn't work on Toronto's Bay Street or for one of the big banks. Instead, he rocks the world's natural-gas markets from his hometown of Calgary, according to the just-released Trader Monthly ranking of best-paid traders.
Brian Hunter, 32, raked in an estimated US$75-million to US$100-million in 2005, good for a share of 29th spot in Trader Monthly's annual ranking. Mr. Hunter generated US$800-million in profit for his employer, Amaranth Group Inc., making him one of the world's top natural-gas traders, the magazine reported.
Small wonder Amaranth agreed when Mr. Hunter decided he wanted to leave the New York area and return to his home and native land. Amaranth opened an office in Calgary for Mr. Hunter and his team, according to Trader Monthly.
According to Sparkspread.com, which tracks the energy-trading business, Mr. Hunter and Amaranth profited from laying down the right bets when Hurricane Katrina created big price gains in energy markets. Those caught on the wrong side of the trades when Katrina hit suffered huge losses.
By some estimates there are more than 400 hedge funds trying to play the energy-trading game now, a fourfold increase in recent years, as money managers look for ways to diversify away from the stock market and add to earnings. Hedge funds feed on markets that quickly swing up and down, and energy markets are among the most volatile.
Investment banks have also joined the fray. Goldman Sachs Group Inc. and Morgan Stanley each make more than US$1-billion a year from commodity trading, which includes buying and selling of energy, according to Sanford C. Bernstein & Co. analyst Brad Hintz.
Sparkspread.com reported demand for commodity traders is so hot, rival hedge fund SAC Capital tried to hire Mr. Hunter with an offer to pay up front his estimated yearly bonus of US$10-million."
Published: Tuesday, March 28, 2006
"Canada's top-earning trader doesn't work on Toronto's Bay Street or for one of the big banks. Instead, he rocks the world's natural-gas markets from his hometown of Calgary, according to the just-released Trader Monthly ranking of best-paid traders.
Brian Hunter, 32, raked in an estimated US$75-million to US$100-million in 2005, good for a share of 29th spot in Trader Monthly's annual ranking. Mr. Hunter generated US$800-million in profit for his employer, Amaranth Group Inc., making him one of the world's top natural-gas traders, the magazine reported.
Small wonder Amaranth agreed when Mr. Hunter decided he wanted to leave the New York area and return to his home and native land. Amaranth opened an office in Calgary for Mr. Hunter and his team, according to Trader Monthly.
According to Sparkspread.com, which tracks the energy-trading business, Mr. Hunter and Amaranth profited from laying down the right bets when Hurricane Katrina created big price gains in energy markets. Those caught on the wrong side of the trades when Katrina hit suffered huge losses.
By some estimates there are more than 400 hedge funds trying to play the energy-trading game now, a fourfold increase in recent years, as money managers look for ways to diversify away from the stock market and add to earnings. Hedge funds feed on markets that quickly swing up and down, and energy markets are among the most volatile.
Investment banks have also joined the fray. Goldman Sachs Group Inc. and Morgan Stanley each make more than US$1-billion a year from commodity trading, which includes buying and selling of energy, according to Sanford C. Bernstein & Co. analyst Brad Hintz.
Sparkspread.com reported demand for commodity traders is so hot, rival hedge fund SAC Capital tried to hire Mr. Hunter with an offer to pay up front his estimated yearly bonus of US$10-million."
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Helpful question,Old Trader.
Actually when you ponder it some more;
sounds like with an UNUSUALY great year last year[75 million], perhaps could be easy to think/ act carelessly.
Especially if he believed/dwelled on his own newspaper articles
And also profits can /do come in trends also;
when your'e hot you'r 'e HOT,
and when you not your NOT.
Plus the understandably but deadly ''pride'' ouirselves on risk control'';
pride sunk the titanic as Mark Cook said, the iceberg was just in the way.
And dont want to be to tough on Senior management;
but [if ?]mr Hunter gets nothing last half this year, still been a great last 2 year s pay day for mr Hunter
http://workingtorontojobs.canada.co...6d67e0&q=trader&qMiles=10&pp=25&view=1&page=1
Looks like they are hiring Hunters replacement.
Looks like they are hiring Hunters replacement.
One of the articles someone put up at the start had some stuff on this guy's past. This guy feels like trouble.
The juiciest bits details Brianâs fiery relationship with his former employers, Deutsche Bank.
Mr. Hunter personally generated $17 million in profit in 2001 and $52 million in 2002, according to a complaint he later brought in state court in New York. By 2002, he pulled down more than $1.6 million in salary and bonus and began supervising the gas desk in 2003.
In December 2003, just as his group was close to ending the year up $76 million, he claimed in the suit, things went awry. In a single week, they had losses of $51.2 million, he said in the suit. He blamed "an unprecedented and unforeseeable run-up in gas prices" along with "well-documented and widely known problems with" Deutsche Bank's electronic-trade-monitoring and risk-management software, which he said hurt traders' ability to extricate themselves from bad trades. Deutsche Bank denied its systems were to blame.
Mr. Hunter argued that even though the desk as a whole posted a loss, he personally made trades that netted the bank $40 million that year. He and his natural-gas colleagues got no bonus. By February 2004, relations had soured to the point that supervisors locked him out of the trading system and made him an analyst, moving him off the desk. Mr. Hunter left in April and subsequently sued over the withheld bonus and claimed Deutsche Bank defamed him. It denied the allegations. The suit is pending.
There are also hints that the seeds of Amaranthâs current troubles may have been planted when the much more conservative energy trader Harry Arora left the fund to start his own energy trading outfit last spring. Brian became the head of the energy trading desk at Amaranth, and moved operations up to Calgary.
The juiciest bits details Brianâs fiery relationship with his former employers, Deutsche Bank.
Mr. Hunter personally generated $17 million in profit in 2001 and $52 million in 2002, according to a complaint he later brought in state court in New York. By 2002, he pulled down more than $1.6 million in salary and bonus and began supervising the gas desk in 2003.
In December 2003, just as his group was close to ending the year up $76 million, he claimed in the suit, things went awry. In a single week, they had losses of $51.2 million, he said in the suit. He blamed "an unprecedented and unforeseeable run-up in gas prices" along with "well-documented and widely known problems with" Deutsche Bank's electronic-trade-monitoring and risk-management software, which he said hurt traders' ability to extricate themselves from bad trades. Deutsche Bank denied its systems were to blame.
Mr. Hunter argued that even though the desk as a whole posted a loss, he personally made trades that netted the bank $40 million that year. He and his natural-gas colleagues got no bonus. By February 2004, relations had soured to the point that supervisors locked him out of the trading system and made him an analyst, moving him off the desk. Mr. Hunter left in April and subsequently sued over the withheld bonus and claimed Deutsche Bank defamed him. It denied the allegations. The suit is pending.
There are also hints that the seeds of Amaranthâs current troubles may have been planted when the much more conservative energy trader Harry Arora left the fund to start his own energy trading outfit last spring. Brian became the head of the energy trading desk at Amaranth, and moved operations up to Calgary.
Update:
http://www.smh.com.au/articles/2006/10/01/1159641209569.html
Q
AMARANTH Advisors, the $US9.2 billion hedge fund that lost $US6.5 billion ($8.7 billion) in less than a month, is preparing to shut down.
UQ
http://www.smh.com.au/articles/2006/10/01/1159641209569.html
Q
AMARANTH Advisors, the $US9.2 billion hedge fund that lost $US6.5 billion ($8.7 billion) in less than a month, is preparing to shut down.
UQ