How do you lose $5 billion in one week?

"....I've heard that their trade was profitable. Illiquidity was the problem...more specifically GREED............"

Actually i think it had more to do with impact cost. As Nat Gas futures moved lower, Hunter kept doubling down. His buying was large enough to have significant upward impact on the market. He apparently did not realize the extent to which his purchases were supporting the market, which if allowed to assume its natural course would have moved still lower. When he ran out of money, the market moved on down to where it was trying to go in the first place. Hunter misjudged the impact cost of his buying and in the process took on way to much leverage.

Tha's my take anyway.
 
"....Why wasnt a stop put in a long time before the excess of bleeding 5b?"""

As someone pointed out, illiquidity! For a stop to work there has got to be a willing buyer on the other side.

If you want to know why something wasn't done "a long time before" than you have to conclude that the trader's inexperience did not make him sufficently cautious. In a word, he goofed up big time! And too, there should have been more oversight from experienced hands when a position is that large.
 
hedge funds are such a scam... they take 20% on high water marks, so the traders are encouraged to take big risks. when the trade goes rotten, it's the investors taking the hit, and he is not gonna spit out 20% he already took.
 
Crikey, I feel his pain. Leaves only 50 percent of the 50 percent left in the fund, 18.75 million, plus the 37.5 he took out.

Quote from riskarb:

A large portion of Hunter's comp was left in the fund.
More...
 
My snide aside, below, is obvious, I know, but so is this blow up. So obvious that it defies belief. I mean the guy stayed and traded in Calgary, his hometown. How Big League could he be? He’s the home trader juking to Rick Derringer. Nat gas and rock n roll Hoochie Koo don’t mix, apparently.
Quote from Chood:

Crikey, I feel his pain. Leaves only 50 percent of the 50 percent left in the fund, 18.75 million, plus the 37.5 he took out.
More...
 
i haven't seen all the details, but is there any knowledge if there were any significant named counterparties on the other side of these spreads? there must be some happy faces out there.
 
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