The following well-known and quite instructive real-life story is well suited to illustrate the dangers of stack-and-roll and the role of liquidity. At the beginning of the 1990s, Metallgesellschaft (MG) sold rather long-term contracts (5-10 years) for the supply of oil-related products, like heating oil, at a fixed delivery price. Hence, in order to hedge the risk of an increase in the price of oil and its derivatives, they took long positions in oil futures. Since oil futures were not available with a corresponding long maturity, the hedge was rolled forward. Then, after 1992, a drop in the oil price occurred. In terms of the contracts that MG were selling, this was great news. Unfortunately, this implied considerable losses in the hedge, and this had to be sustained immediately, given marking-to-market. These losses, in principle, would have been compensated in the future by the payoff of the contracts that MG had sold, but this did very little to alleviate the ensuing short-term liquidity issues. In the end, the hedging strategy had to be stopped and the outstanding contracts with their customers were canceled, with a loss that is estimated to be around \(\$ 1.33\) billion.