November 19, 2018 / 10:03 PM / 21 days ago

UPDATE 2-OptionSellers.com investors hit by natgas swings -INTL FCStone

(Adds latest natural gas prices)

By Scott DiSavino

NEW YORK, Nov 19 (Reuters) - Commodities trading adviser OptionSellers.com suffered losses due to recent volatility in U.S. energy markets, causing accounts to be liquidated, the firm’s clearinghouse, INTL FCStone Inc, said in a statement on Monday.

The liquidation of Tampa, Florida-based OptionSellers accounts comes after one of the most volatile weeks in the U.S. natural gas market in years, as commodities funds scrambled to unwind bets after sudden reversals in the oil and gas futures markets.

Natural gas posted its biggest one-day percentage gain in eight years on Wednesday, only to follow with its largest one-day loss in 15 years the next day.

Natural gas volatility “caused liquidity stress” for commercial and institutional customers of certain futures merchants, INTL FCStone said in a statement.

“Although well collateralized, accounts managed by a Commodities Trading Advisor, OptionSellers.com, had to be liquidated as a result of these moves,” the statement said.

OptionSellers.com did not respond to calls and emails requesting comment. The extent of investor losses is unknown.

Over the past three weeks, natural gas futures jumped about 34 percent. The contract rose 18 percent on Nov. 14 and lost 17 percent on Nov. 15, the biggest one-day percentage gain since 2010 and loss since 2003. Gas prices gained 10 percent on Monday.

Funds have been forced to unwind bets swiftly in recent days, as many had placed bets that natural gas would continue its recent weakness while oil rallied. Last week, the reverse happened, with sharp moves in both commodities in the opposing directions.

John Chapman of ChapmanAlbin, an investor rights law firm in Cleveland, said his firm has been contacted by at least 100 OptionSellers investors over the past few days.

“In this instance they jumped in with both feet and their clients got crushed,” Chapman said, noting he spoke with investors who held $250,000 or more in their accounts. He said some investors who had borrowed through margin accounts could, in effect, be forced to pay for those losses.

James Cordier, president of OptionSellers.com, was unavailable for comment. He, his partner and former firm Liberty Trading Group were charged nearly $50,000 for improper trading in a lawsuit before the U.S. Commodity Futures Trading Commission (CFTC) in 2013.

Reporting by Scott DiSavino; additional reporting by Jessica Resnick Ault; Editing by Dan Grebler

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