Great resource on the inner workings of a hedge fund trading nat gas futures. A cautionary tale.

I came across this Senate report on the collapse of Amaranth Advisors and thought it was a great read. For anyone looking to learn more about commodities this is worth the time. It goes in depth into the nat gas market (although some of it is dated now, the ideas still stand), how professional traders actually form positions and biases, what products they often trade (calendar spreads), how futures markets function, and some of the 'hidden' risks they have when you start trading in size.

The book 'Hedge Hogs' touches on a lot of the stuff in this report but this is a lot more in depth on all the details of their trading book and what led to the collapse.

https://www.hsgac.senate.gov/wp-content/uploads/i…

 

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