- The unprecedented spike in European and Asian gas prices has apparently subjected major trading houses to massive margin calls that have put strains on their liquidity resources.
- This mismatch between timing of cash flows on a hedge instrument and the underlying physical can create extraordinary cash flow strains that can put a trader into financial distress.
- Another interesting aspect of the recent LNG spike is that unlike the one last winter, this one has not seen an explosion in LNG shipping rates.
For further details see:
Netback Hollaback? Probably Not