3 Takeaways From the Recent Options Market Slide

Posted On November 19, 2018 1:45 pm

businessman upset, stock market crash

Source: Shutterstock.com/g/bylove

The fallout out from last week’s Natural Gas surge is still coming down. Its casualties range from professional and supposedly sophisticated hedge funds — ranging from their wealthy clients to small retail investors.

Last week I wrote how Natural Gas’s huge move was exacerbated by hedge funds unwinding positions, which resulted in a 35% price explosion — likely leading to large losses and potential business collapses.

Sure enough, several funds, including high-profile Andurand Commodities Fund lost 20 percent-plus in a matter of days.

Interestingly enough, this comes almost exactly 10 years after hedge fund Amaranth blew up and lost some $9 billion; clients are still waiting to recoup some of their money.

There’s a reason… Continue reading at StockNews.com

About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.