Say you’re Chesapeake Energy and you’re hedging your 4BCF of daily production. You’re doing deals with the major banks. And your not doing all of your deals with the same bank, in case it goes belly up. The banks are doing the opposite deals with people you mentioned. But the banks also take positions sometimes because they want to and sometimes because they have to in order to make the deal. You just hope they don’t over extend. Considering the (to big to fail / government is going to bail them out) world we live in..... I’d guess they’re all over extended in a variety of sectors.
risk arb ops have closed. banks have cut exposure all over the place building up reserves.