Archive

market blowups

Jun 02 Amaranth and the Trade That Got Too Big A natural gas calendar spread is one of the cleanest trades in commodities. By September 2006, Amaranth's version of it was a large share of an exchange contract's open interest. That is not a position. That is a financing problem wearing a position's clothes. May 26 Archegos and the Position No One Could See Archegos did not need a famous fund, a public portfolio, or a complicated story. It needed banks looking at their own slice while the same trade grew everywhere else. May 26 XIV and the Product That Shorted Panic XIV did not fail because volatility rose. It failed because the product was built to give inverse daily exposure to a market that can jump faster than holders can react. May 26 Knight Capital and the Trade Nobody Put On Knight Capital did not lose $460 million because a trader made a bad call. The position came from code, stale controls, and a system that stayed connected too long. May 25 Nick Leeson, Account 88888, and the Trade Barings Could Not See Nick Leeson did not just make a bad bet on Japan. Barings let a losing book become an accounting fiction until the fiction needed more cash than the bank could survive.