How Did Paul Rudor Jones Influence Brian Hunters's Behavior

Paul Tudor Jones was a young prodigy on Wall Street in the early 1980s (130). His investment style was one of a kind at the time. Trading to him was a psychological game mixed with excellent poker faces. He believed that you have to be able to sense what your fellow traders were up to in order to beat them, and in order to see how they might react in certain market situations (131). Paul Jones thought that the more you pay attention to your rivals, the more you will be able to predict their actions and it will increase your chances of getting in side their heads and luring them in and out of the market (132). It also gave him a heads up on which way the market was going to sway depending on his rivals’ behavior (141). Paul Jones really paid
His claim to fame was an extremely bullish bet on natural gas prices in 2005 that made him one of the most recognized traders in the U.S. He built up the fund to over $9 billion in assets, however it all collapsed in 2006 after a gamble on the futures market took a wrong turn (313). Brian Hunters was the main contributor to the Amaranth’s success, and also to its quick downfall. Hunters’ strategy was seemingly simple in which held on to positions in the winter and short those positions in the summer (312). For Hunter, it worked well and was a safe bet at the time. Another strategy he used involved using volume for a short period of time to push the market around. He used this mostly right before a futures contract was going to expire. He did this because usually during the last few minutes because the more he would sell the more the prices would drop. His manipulative strategy, “banging the close” was illegal and he got in trouble for it later
Hunter eventually took speculative positions using natural gas futures contracts, which worked in his favor for some time, most notably after hurricanes Rita and Katrina upset natural gas production (313). That pushed up the natural gas prices three times higher. Hunter’s speculations at the time were accurate and made Amaranth over $1 billion (314). With Hunters’ newfound fame and confidence in his speculative trading, he went for it again and put leveraged bets in on natural gas. However, natural gas prices dropped severely, and in the end he lost the company $6 billion and no hurricanes had been experienced in the U.S (317). On top of that, Hunter also used a strategy of “doubling down”, which is borrowing more money to kick off new positions. (319). The fund became even more leveraged and rapidly lost money as the natural gas prices