Black box hedge funds the winners from oil price drop

Oil Barrels

To make money from the sharp fall in oil prices this year, it helped if you weren't human.

Reuters reports that while a handful of big name traders have profited from some of oil's 35% plunge, it has been computer-based or 'systematic' funds which have captured much of the spoils.

These black box funds use programs to follow various asset classes and look to latch on to market trends. So after crude lost 46% in 2014, they were already betting strongly at the start of this year that the trend would continue, largely through oil futures and other energy derivatives markets.

Apart from a modest recovery early this year, crude prices have mostly been a one-way bet and now languish 66% below their levels around $115 a barrel 18 months ago.

To access the complete Reuters article hit the link below:

Black box hedge funds lead winners from oil collapse

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