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Natural Gas Price Volatility Gets US Hedge Fund $400M

Natural Gas price volatility helped one US hedge fund make more than $400 million in gains in October alone. Statar Capital, based in Miami and led by Ron Ozer, a former trader at Citadel and DE Shaw, profited around 23.5 percent last month, according to numerous sources familiar with the firm’s performance. The gains are a rebound from Statar’s $130 million loss in the first two-and-a-half weeks of September. Natural Gas prices have soared this year as demand has recovered and supply has become constrained, but the market has become more volatile in recent weeks.

Gas prices in the United Kingdom, which were up more than 500 percent for the year early last month, have plummeted along with continental European prices in October, sliding nearly a quarter on signals Russia could resume exports after months of restrictions. In the meantime, US prices on the Nymex commodity futures exchange saw sawed in October, rising to almost $6.40 per million British thermal units at one point before briefly dipping below $5, only to rebound quickly.

According to one family member, Statar could profit from market volatility by frequently leveraging drops in short-term contracts as an opportunity to build positions before reaping profits during price rebounds. Statar is one of the great hedge fund winners from a difficult month for some markets, including a significant upheaval in bonds.

The gains, which correspond to more than $400 million in trading profit for October, made it one of the giant hedge fund winners from a volatile month for some markets. Long periods of falling prices have made it harder to make money, and several businesses, like Armajaro Asset Management and Astenbeck Capital Management, have closed funds.

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