DRW Loses $176 Million on Q1 Power Trades, Cuts Risk After Freeze
Updated
Updated · Financial Times · Jun 12
DRW Loses $176 Million on Q1 Power Trades, Cuts Risk After Freeze
1 articles · Updated · Financial Times · Jun 12
Summary
$176 million in adjusted losses hit DRW in the first quarter after a North American winter freeze sent power prices sharply higher and wrecked the firm's transmission-capacity trade.
$619 million in revenue, down from $646 million a year earlier, accompanied the loss as February's colder US weather triggered an outsized move against DRW's position.
DRW responded by cutting risk and parting ways with the head trader who led its US power and natural gas desk, calling it a significant loss tied to an extreme market event.
Several hedge-fund trading pods were also caught by the same gas and power swings, though broader market volatility has lifted rivals such as Jane Street, Hudson River Trading and Citadel Securities.