-->Amaranth, which made so-called spread trades that try to profit from price discrepancies among futures contracts...

Investors said the funds, Amaranth International and Amaranth Partners, wagered that the difference between futures prices for natural gas in the summer and winter months would continue to get larger, a trend that's held since at least the beginning of 2004. Futures are contracts to buy or sell a commodity on a specific date at a preset price.

Instead, the spread collapsed. The difference in price between the 2007 March and April contracts for natural gas peaked in July at $2.60. That shrunk to $1.15 by the end of last week. The spread between the two was about 75 cents today on the New York Mercantile Exchange.

Spreads between March and April contracts in 2008, 2009 and later have also collapsed.


<ul> ~ Amaranth Says Funds Lost 50% This Month on Gas Trades </ul>