Why negative oil prices are the new ‘Big Short’

The Telegraph 29 April 2020

Chad Slater, an Australian hedge fund trader, had actually been cutting his bets against oil companies in recent weeks, assuming the oil price could not fall any further. Last week proved him wrong and the oil price dropped below zero for the first time in history. “I can safely say this wasn’t in my forecasts,” he says.

Nor was coronavirus but he is well placed to profit from the pandemic and broader crisis, as co-founder of Morphic Asset Management, which bets against polluters such as airlines and oil giants.

In Michael Lewis’s blistering account of the financial crisis – The Big Short – a handful of lone traders and hedge funds bet against the world’s most powerful banks, and won. Today Slater and a few others see a similar opportunity for a big short. This time, they say, it’s not mortgages but carbon risk that everyone has mispriced.

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