Oil Trader bankrupts SemGroup

nazzdack · Jul 22, 2008

?.....they lost money on futures hedges AND they weren't able to collect on their "expected profitable" cash market positions because the other party reneged on those trades combined with detrimental basis movement? Don't you just hate it when people do that!

kickboxers · Jul 22, 2008

these hedge funds do trades by phone and voice and signatures.

Quote from TraderZones:

This is ANOTHER reason that eventually, human traders will disappear from financial firms, and secured, heavily-tested and heavily-guarded ALGORITHMIC trading will take over.

Bogan7 · Jul 22, 2008

Quote from bh_prop:

Problem typically is a cash flow squeeze. Futures are marked to market and clearinghouses will continually make margin calls as prices rise. Also, if the price of the physical commodity you are long rises less quickly than the short futures hedge, you lose. If there was any speculative short selling outside of normal hedging practices, that would obviously contribute to losses as well.

Exactly the same thing happens to many farmers (especially ones that listen to the wankers at the NAB) over here. Hedging commodities isnt as simple or as safe as many believe there are many factors that can screw the undercapitalised hedger

daddyeaux · Jul 22, 2008

I think the same thing killed Amaranth trading nat.

stock777 · Jul 22, 2008

The commodity markets are there to make the exchanges rich, not to help any farmer

kickboxers · Jul 23, 2008

there isn't enough volume in the cash real market to even have an exchange.

Quote from stock777:

The commodity markets are there to make the exchanges rich, not to help any farmer

aboldoldtrader · Jul 23, 2008

Quote from TraderZones:

This is ANOTHER reason that eventually, human traders will disappear from financial firms, and secured, heavily-tested and heavily-guarded ALGORITHMIC trading will take over.

Will robots create the algo's?

bh_prop · Jul 23, 2008

Nope, he blew up making bets on the summer/winter spread. Basically was betting on huge (and I do mean huge) winter over summer spreads and they narrowed drastically.

Quote from daddyeaux:

I think the same thing killed Amaranth trading nat.

daddyeaux · Jul 23, 2008

I only know enough about nat. to stay away from it..

it's worse than silver

jaytrader100 · Jul 23, 2008

Amaranth had 90,000 contracts of natural gas...in spreads
500,000 bp of oil is only 500 contracts a day!
the wheat trader at mf global did 25,000 contracts of wheat at mf global and lost 140 million..evan dooley