Wizardry that went wrong at Metallgesellschaft

Arthur Benson of Metallgesellschaft fame,
He was a wizard, He was a warlock,
He was a wonder of the 90’s age of complex oil derivatives trading.

He sold fixed price oil contracts forwards,
And stack hedged all of his position in the front month contracts,
With the power in his pinky, he burst forth like a tiger – unperturbed amongst bulls and bears.

If spot oil prices went up, his fixed price forward contracts lost the money,
But his stack hedge made him neat stashes of money,
If spot oil prices went down, his stack hedge made him lose the money,
But his fixed price forward contracts compensated him handsomely.

O! But despite his mighty magic, there is something pertinent he didn’t foresee,
The winds of a market change blew over; spot prices fell, and front month contracts fell too – but not enough relatively,
Destiny had waved its wand, and presto – the markets had changed from backwardation to contango.

Poor Mr. Benson! He had no ready incantation to meet his margin calls or make his losses deftly disappear,
Done in by the market shift, and no sight of fresh funding to hold positions, Mr. Benson’s bosses called it a day for him and wound down his trades at an estimated loss of $ 1.6 billion,
A sorcerer, magician, prestidigitator felled by an impassive market – the world of financial wizardry may indeed bear complacently the loss of yet another trader in the system, but any loss to verily its ability to trade will drive itself to despair.