Legendary oil trader forced to shutter hedge fund amid low prices

[Overnight]

“It looks increasingly like oil prices will be range-bound for some time to come,”...

If the guy thinks it will be range bound, then why does he need to shut down his fund? Oil was range bound for quite a time in spurts over the spring/ summer this year.

“Now there’s a real lack of intraday volatility, which makes it harder for funds both short-term and long-term to sustain losses in their portfolio,” he said."

So all these guys are the same. They are simply directional traders looking for breakouts. Shit, we retail punks do that for a living on tiny positions.

So a hedge fund really has no edge, which I have proven to myself in my calendar spreads. You enter in both directions, see which one takes, close the leg that seems to wither and pray for the best on the other leg continuing.

WOW! So I am as smart as the hedge fun guys! That is effectively what they are doing.

No need for swaps and options and all that jazz.

 

[FriskyCat]

“It looks increasingly like oil prices will be range-bound for some time to come,”...

If the guy thinks it will be range bound, then why does he need to shut down his fund? Oil was range bound for quite a time in spurts over the spring/ summer this year.

“Now there’s a real lack of intraday volatility, which makes it harder for funds both short-term and long-term to sustain losses in their portfolio,” he said."

So all these guys are the same. They are simply directional traders looking for breakouts. Shit, we retail punks do that for a living on tiny positions.

So a hedge fund really has no edge, which I have proven to myself in my calendar spreads. You enter in both directions, see which one takes, close the leg that seems to wither and pray for the best on the other leg continuing.

WOW! So I am as smart as the hedge fun guys! That is effectively what they are doing.

No need for swaps and options and all that jazz.

The articles is from mid-2017, it obviously doesn't apply to the present (unless you think a 30% drop in 6 weeks qualifies as "range bound").

 

[Overnight]

The articles is from mid-2017, it obviously doesn't apply to the present (unless you think a 30% drop in 6 weeks qualifies as "range bound").

Oh, I thought that article was posted with relation to this past 5 weeks of oil movement. My bad.

 

[ET180]

Surprised that it took so long for people to realize that this was from 2017. Wow.

 

[FriskyCat]

Oh, I thought that article was posted with relation to this past 5 weeks of oil movement. My bad.

Yes, that's why I asked the O.P. why he posted a 15 month old article. I remembered this article from the crude lows around $42-ish back then right about the time this former oil fund guy shut the doors. Of course, with the benefit of hindsight crude almost doubled from those lows (very much like the 2007 blow off top).-on an obviously much smaller scale.

 

[sle]

Luck plays tremendous role in running big hedge fund

Luck plays a tremendous role in any success

 

[HeSaidSheSaid]

retail traders can't compete with theses big oil companies and nations states who is well equipped with insider information and money. We can't compete with them in the long run.

Generally, commodities futures are bad for consumers. Everyone is paying for some Wall Street middle men their pen house, yacht, Lamborghini,...

 

[d08]

What's next - "it looks like Apple isn't rallying as it used to every month, I'm closing everything down".

The people hide behind big offices, suits, PhDs but what they do is clearly 99% networking and getting OPM, 1% trading/investing.

They're still smart, there are a lot of low intelligence people out there with massive inherited wealth. Low hanging fruit for these guys.

 

[helpme_please]

It is misleading of OP to open a thread using a news article 1 year ago. I found it hard to believe the headline initially because I thought shorting oil was an easy trade since Oct 2018. Look at the chart and it should be easy for the elitetraders here to see. Why would a prominent oil hedge fund close down in the midst of an easy trade?

 

[sle]

What's next - "it looks like Apple isn't rallying as it used to every month, I'm closing everything down".

Pretty much every big guy that switched his fund to a family office said more or less exactly that.

It's pretty much always the issue of biting off more than they could chew. It's hard to make money at the scale all of these guys gotten to. Personally, I think a single strategy fund should have 250 or so in AUM, or a multi-strat should allocate about that much per strategy.