Did A Huge Commodity Fund Blow Up At 2:30PM Wednesday?

Did A Huge Commodity Fund Blow Up At 2:30PM Wednesday?

Markets took a beating Wednesday. This week NYMEX Light Sweet Crude Oil futures fell below the $30 level and commodity exposed names have been the wet dog in January.

At the cash close for oil futures at 2:30PM on Wednesday there was a massive sell program running various stocks.

Sources participating actively in the oil trade, both physical trading and warehousing, tell Benzinga an unnamed fund forced by NYSE to liquidate at the 2:30 cash close for oil was the culprit of the massive selloff in S&P 500 futures.

This was seemingly done to mask the selling. To find out if there was unique trading indicating a forced liquidation, we contacted Eric Hunsader over at Nanex. He said he saw “no panic selling” and followed up saying if there was a planned liquidation it is likely it was orderly and flew under the radar.

The past few months have seen many funds coming under pressure. SAB Capital Management returned client money, Renaissance Technologies closed a $1 billion fund, Third Avenue liquidated its Junk Bond fund, and the list goes on. The stand out is Nevsky Capital. The firm closed a $1.5 billion fund just 8 days ago. It is unclear if Nevsky was the 2:30 Jan 13th liquidation event.

Tangent to the reported forced liquidation event, two unidentified hedge funds have been absent from the trading floor since the holidays according to the same source.  

We will update with more details as they develop