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Couple people lost jobs today, that’s for sure.
Guys in my office spec it quiet a bit, but we’re mostly a power shop. Some guys left early today to ease the temptation of trading more of it.
As per SparkSpread today: "Hedge funds said to get caught by “widowmaker” trade
U.S. hedge funds that were short a popular natural gas calendar spread trade known as the “widowmaker” are said to be facing steep losses due to this week’s dramatic spike in gas prices."
Just a side question, but is there as much gas trading in Europe as there seems to be in the States?
Commodity guys seems like they are in big time pain.
Citadel lost big on natty. Bbl commodities I’m hearing is bankrupt. $20 down in oil in a month will do that.
And a lot of funds already shut down this summer I believe from Brent-ti trades
Hedge funds as a whole would be getting wiped out this month if we didn’t have $300 billion in corporate buybacks rest of the year. I’m as bullish as anyone in equities but with year end redemptions coming into tomorrow it would be a nasty market that would kill a lot of people.
Small caps crushed. Banks crushed which most guys seem to think are cheap. Faang blowing out anyone who got in late. I was already shocked that a company like nvda could go from 280 to 170 in a couple weeks but if we didn’t have buybacks the markets wouldn’t be able to handle the selling that’s coming.
This market is cheap only 16 times forward pe and even if you think earnings can’t grow 7% next year still reasonable.
It just seems like fundamental shops are blowing out all year. I don’t know what it is with our machine overlords but a lot of shops seem to be getting destroyed.
Where you hear about citadel? I’m not sure if the ‘fundamental’ trade was to sell Mar/Apr lol
As per SparkSpread today: "Hedge funds said to get caught by “widowmaker” trade
U.S. hedge funds that were short a popular natural gas calendar spread trade known as the “widowmaker” are said to be facing steep losses due to this week’s dramatic spike in gas prices."
sitting out for this one. Not rich, but still have my job....and my shop
A lot of the gas guys I know are sitting there with you, they’d love to be in it, but love having their job/shop more.
Im doing perfectly well trading my basis shit. I meant im not getting into trading merc cause it looks juicy
Not trading it, but working hand in hand with the traders. Been a crazy few days.
BBL tapped out?
heard that as well. Crude/Gas
yikes
Heard he’s broke and not just shut down. Not sure if that is true charts look nasty enough to cause that.
Machines really messing things up. Ltcm had a couple months. This was a month and then a weekend.
I know some power guys were short jan/feb.....there was no way mar 19 storage levels were ending up above 1.4 TcF. I think the last two winters really led people to believe that production would bail them out. Also agree with being long summer 19 gas...its going to be really hard (not impossible tho) to get to 4TcF by oct 19 even at 87BcF/d.
deliverability becomes your problem, not lack of molecules
Not trading it but scheduling it. Been an interesting last week.
What region?
NE and GOM
x
The trade made money every year for last 10 years. Sometimes people just get comfortable, especially when most guys trading were not around the last time the spread blew out. It is also crazy that a weather forecast could affect March...I would expect most of the demand-kill response to come in prompt month and maybe next month, and then rely on cash to back fill any change in forecast. To see the entire winter blow out like that just tells you how short the market really is. Will be interesting when LNG really gets going...
That's interesting...This move seems like it's been in the making for weeks now...early fall market seems to realize the storage situation and then just a few weeks ago weather models start showing below normal weather for much of NA and here we are.
Totally agree: people forget what this kind of payoff function looks like, then have to try and explain in their interviews why they blew up being short tail risk.
More than just how short the market was.... this is also a sign of how much algo money is running thru things.
We’ve now seen how this trade ended up. The short worked. I think ten years ago the blow up doesn’t happen. Market players reprice the spread because we had a cold day. But it doesn’t blow out. Machines force peoples hands into losses.
lol(
)
Lets bail all of them out!
Edit: I just watched this, worst apology video ever. Maybe lose the Rolex and don't bring up the "days of being on my Dad's 800 foot yacht." NG really is the widowmaker
So whats the impact of the new weather forecast for Vegas this summer? More hot than usual....or cooler than usual?
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