The Derivative

Latest Episodes:

Wallstreet Bets Busts Wallstreet? WTF ^%$# Jan 28, 2021

Show notes

If you’ve been on the internet, watched TV, or talked to anyone outside of yourself in the past week and a half you can’t have missed it. GameStop stock ($GME) went from trading at a low of $3/share to +$400/share thanks to a masterful subreddit trolling from retail traders. And it’s not stopping at just GameStop, shares from Blackberry ($BB), AMC ($AMC), Express ($EXP) and Nokia ($NOK) are quickly following suit – and its leaking over into S&P futures and options. So how does this happen, why is it busting the billionaires, and how does it end? We’re joined by The Derivative veterans Cem Karsan and Kris Sidial to get the low down on all this and more in our newest WTF ^%$# installment, coving all things r/wsb, GME, gamma hedging, short squeezing, rates, AI, and even inequality.

*BONUS SECTION: After the “official wrap up” we continued to riff a little, so make sure to stick around at the end for some additional Cem, Kris, and Jeff convo.*

Get more information on the funds at Ambrus Group here and at Aegea Capital here.

Chapters:

00:00-01:46 = Intro

01:47-15:54 = GAMMA, Risk, Flows & Squeezes

15:55-29:03 =Leverage cuts both ways

29:04-36:15 = How Does This End? More Sex?

36:16-53:24 = BIGGER, FASTER, BETTER

53:25-01:05:19 = Passive, Inequality, and Rates

01:05:20-01:21:28 = Final Thoughts

Follow Kris (@Ksidiii) and Cem (@jam_croissant) on Twitter to keep up with all of this and much, much more.

Check out our other WTF^%$# episodes here: No President Yet, So Market Rallies Huge What ^%$#?, Market Up/Vol Up, Market Down/Vol Down…WTF Episode, $TVIX gets Terminated – What^%$#, Crude Oil goes Negative… What^%$#.

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer

Wisdom from the Wizard Maker with Jack Schwager Jan 21, 2021

Show notes

Welcome to the Wizarding World of Market Wizards – and today’s special guest is head wizard who wrote the actual books on market wizards, Jack Schwager. Jack has written 6 books on the markets including his original: Market Wizards and the newly released: Unknown Market Wizards. In addition to his authoring (is that even a word?) Jack has served as a Director for futures research - meaning he knows soybean contract from a Spac. In today’s episode, we’re covering all things Market Wizard books, along with some fun conversation including Colorado, FundSeeder, favorite interviews, and more.

Chapters:

00:00-02:00= Intro

02:01-15:45= Fundamental Analyst to Author

15:46-32:14= The Market Wizards Interviews

32:15-47:45= Unknow Wizards

47:46-01:00:26= You Can't Train Talent

01:00:27-01:14:57= Favorites & Words of Wisdom

Purchase Jack’s books here including his new book: Unknown Market Wizards, and follow along with him on Twitter.

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

Gold, Gas, and Global Inflation with Diego Parrilla of Quadriga Asset Managers Jan 14, 2021

Show notes

2020 was ruled by global macro events – are we looking at the same fate in 2021? Our guest today can talk not only global macro, but also volatility, bond yields, correlation, oil, metals and more. To ring in the new year we’re joined by Diego Parrilla, Managing Partner at Quadriga Asset Managers and Author of "The Energy World is Flat" and "The Anti-Bubbles.” Diego isn’t just a global macro manager, and in today’s episode we’ll be talking about Spain, quoting complex options, the switch from gas to renewable energy, Beckenbauer bonds, the double digital, inflation on inflation, what’s happening at Quadriga, soccer, becoming an author, sometimes it’s better to be vanilla, privatized inflation, and what’re we going to do with gold?

Chapters:

00:00-02:24=Intro

02:25-17:48=Spain & Soccer

17:49-32:33=The Energy World is Flat

32:34-01:04:17=Inflation-on-Inflation vs Privatized Inflation

01:04:18-01:36:56=What’s Happening at Quadriga

01:36:57-01:39:15=Favorites

Follow along with Diego on Twitter & LinkedIn and check out Quadriga on their website.

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

Butler and Buck Back to Bookend 2020 Dec 30, 2020

Show notes

We’ve already covered the first three months of 2020 with Part I of our 2020 review. We’re now heading into Part II with Jason Buck, CIO at Mutiny Fund and Adam Butler, CIO at ReSolve Asset Management discussing how the fall out of the first three months of 2020 dictated the ending 3/4 of the year. Tune into this next episode to hear more on the possible bond fallout, stimulus holding US markets hostage, the future of the traditional 60/40 portfolio, ReSolve’s Riffs, do deficits matter?, commodity’s role in inflation, “am I a socialist?,” technology improvements in commodity production, the Mutiny Podcast, and the VIX at all-time highs – and what that really means.

Chapters:

00:00-01:44 = Intro

01:45-16:05 = Where do Bonds belong?

16:06-40:13 =(MMT) Acronym of 2020, Inflation & a Dystopian Outlook

40:14-48:12 = Why we NEED Commodities in our Portfolios

48:13-52:37 = Back to the VIX

52:38-59:16 = Favorites

Follow along with Adam on Twitter and LinkedIn, and with ReSolve on their websiteand their ReSolve’s Riffs series.

Follow along with Jason on Twitter and LinkedInand with Mutiny Fund on their website and the Mutiny Fund podcast.

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

2020’s Best Strategies, Styles, and Stories with Adam Butler and Jason Buck Dec 23, 2020

Show notes

2020 has been a year for the books – be it the fastest every market sell-off or a just as amazing tech rally from the lows. Whether you’re looking at it from a social/emotional/fiscal lens, it probably didn’t pan out the way you imagined based on your New Years Resolution. And in today’s podcast, we’re focusing out with the long lens to take a look back at the year that was 2020 to investigate what strategy types got it right, which got it very wrong, and more. We’ve brought on two of our favorite people in the space to add some vol/macro viewpoints to the conversation, Jason Buck, CIO at Mutiny Fund and Adam Butler, CIO at ReSolve Asset Management. To get rolling on part 1 of this 2-part series, we’re covering the early part of 2020 including: Early convexity through Jan/Feb, Cheap protection in the beginning of the year, How Corona blew up the markets in March, The craziest stats during the third week of March, Risk parity, Trend following & volatility strategy performances, The unbelievable rally that followed the crash, and The societal question of big corporations dictating the market.

**Don’t miss out on Part II coming out on Thursday, December 31. Subscribe to us on Apple, Spotify, Stitcher, and/or YouTube to be the first to listen next week!**

Chapters:

00:00-02:07 = Intro

02:08-21:27 = 2020: Pre-Pandemic

21:28-47:19 = The Third Week of March

47:20-53:40 = Let’s Talk Trend, Risk Parity, and Volatility

53:41-01:21:06 = The Rally

Follow along with Adam on Twitter and LinkedIn, and with ReSolve on their website and their ReSolve’s Riffs series and the Gestalt University podcast.

Follow along with Jason on Twitter and LinkedIn and with Mutiny Fund on their website and the Mutiny Fund podcast.

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

Cover to Trend Legends Cover with Michael Covel Dec 10, 2020

Show notes

It’s hard to get too far into the words Trend Following without running into the name Michael Covel. If you’ve ever looked into the strategy type, his name is there. From speeches to his many books, the aptly named Trend Following Radio and his trend following twitter thread, Michael has been digging into the philosophy and people in and around trend following for nearly 24 years. And as our guest on today’s pod, we cover a large span of topics including: living in Vietnam, first COVID flight, market wizard to turtle traders, the Jerry Parker inspiration, great stories from legends like David Harding, Tom Basso, Ed Seykota, Mike Shannon; history of turtle trading, Michael’s array of trend books, Trend Following Radio, all-start guests, the different (unfair) standard for managed futures and trend following, trend following battles, what’s what of trend following, long vs short term trend following, the Chinese and Vietnamese markets, and becoming an investment personality.

Chapters:

00:00-2:39 = Intro

02:40-10:56 = A life Abroad

10:57-26:19 = Move to Trend Following & Successful Author

26:20-46:39 = Legendary Stories

46:40-01:02:01 = Drawdowns & Figuring out the Philosophy

01:02:02-01:08:33 = What’s the Asia Investor Mentality?

01:08:34-01:12:49 = How New Managers can Navigate the Social Media World

01:12:50-01:26:20 = Favorites

From the episode: The Whipsaw Song – Ed Seykota

Get updates on Michael and his work by listening to Trend Following Radio, following him on Twitter and checking out his website.

Order his books: Trend Following, The Complete Turtle Trader, Trend Commandments, and The Little Book of Trading.

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

Really? Real Estate? Right Now? with Matt Lasky and Darren Kottle Dec 03, 2020

Show notes

Many investors look at commercial real estate as a high-risk, confusing, and sometimes scary way to invest. Our guests today show us why this isn’t the case. From commercial real estate, to mortgage-backed securities, pandemic affects, and hedging risk, Matt Lasky of Equity LLC and Darren Kottle of Caddo Capital Management are on today to go through it all. Take a listen to learn more about private investments, hedging real estate with trading models, mortgage-backed securities, favorite investing books, levels of leverage, basic income effects on real estate, real estate debt, yield solo, deflationary periods, Maple & Ash, hedging fixed income, negative rates but not negative mortgages?, the future of large retail real estate, eating in the East Bay, and pandemic effects on future of real estate & mortgages.

Bookmarks:

00:00-02:37 = Intro

02:31-27:23 = The current state of Real Estate and Lasting Effects of the Pandemic

27:24-40:40 = Is Another Stimulus underway? Inflation vs Deflation

40:41-48:23 = Malls: Quality of the Dirt

48:24-01:02:04 = The Ultimate Real Estate Hedge = Having Volatility Model

01:02:05-01:08:04 = Favorites

Follow along with Matt on LinkedIn, Twitter, and the Equity LLC website.

Follow along with Darren on LinkedIn or click here to learn more about Caddo Capital Management’s ACXIX fund.

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

Overheard at a Vol Conference, breaking down EQD Global 2020 Nov 27, 2020

Show notes

One of the leading volatility trading and derivatives investing events of the year wrapped up last month and we have lots of thoughts. From new vol dispersion products to portfolio design, tail-risk management and structural vol; if it’s been a hot topic in 2020 – Global EQD covered it. We’re joined by Jim Carroll, Senior Vice President at Toroso Advisors and John Cummings, Director of Research at RCM Alternatives. There were sessions we agreed with, opinions from some of our favorite finfluencers, and even some sessions that straight up made us scratch our head. So what was talked about by the likes of Benn Eifert, Chris Cole, Vineer Bhansali, PIMCO, the CBOE, and more? Take a listen and find out.

Chapters:

00:00-02:45 = Intro

02:46-14:21 = Quick Takeaways that Caught Attention

14:22-29:54 = Learning 2020s Lessons / Tail Hedge Protection

29:55-35:20 = Largest Risks for 2021 / What Possible Grenades could be Coming?

35:21-59:56 = Vol Strategies in a Mad World

Follow along with Jim (@vixologist) & John (@cummingsjohnb) on Twitter, and make sure to keep up with the team at EQDerivatives (@EQDerivatives) so you don’t miss their next great event.

Here’s the event page over at EQD = https://eqderivatives.com/events/global-eqd-2020

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

The Mysteries and Makings of Machine Learning with Dr. Ernie Chan of QTS Cap Nov 19, 2020

Show notes

Does all this Machine Learning stuff really work? If it’s so good, why aren’t AI powered hedge funds printing money? And what is the difference between AI, machine learning, deep learning, machine trading, and more. Today’s guest is one that’s been at the center of the AI/MT/ML universe for over four decades. Ernie Chan runs a machine learning hedge fund at QTS Capital management, has authored 3 books – with the 4th on the way - and is the creator of PredictNow.ai. Ernie is joining us on The Derivative to talk about machine learning, decision trees, factors, and more factors, Niagara-on-the-Falls, bells & whistles becoming commonplace, Tim Hortons, the basics of machine learning, Les Miserable, ensemble approaches (diversification), classification vs regression, random forest techniques, the merging of AI and Machine Learning, PredictNow.ai, supervised vs unsupervised learning, Harry Potter (instead of Star Wars), and the effects of machine learning on the market.

Chapters:

00:00-02:45 = Intro

02:46-22:38 = Complicated Machine Learning - Going Back to Basics

22:39-38:45 = Basics of Machine Learning, ML vs AI + Unsupervised Learning

38:46-46:34 = PredictNow.Ai

46:35-01:06:07 = Take Us to QTS / You can Still Gain an Edge

01:06:08-01:10:46 = Favorites

You can view and download Ernie’s QTS performance track record via the links below:

QTS Capital Management, LLC. Tail Reaper, QTS Capital Management, LLC.

QTS Partners, L.P. (QEP Only), QTS Capital Management, LLC. VIX Timer (QEP only),

QTS Capital Management, LLC. (Chimera QEP only)

Follow along with Ernie by checking out his published work, following him on LinkedIn, and taking a look at PredictNow.ai & the QTS website.

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

Don’t Buy the Narrative (and It’s All Narrative) with Epsilon Theory’s Ben Hunt Nov 12, 2020

Show notes

Our guest today is somewhat of a modern philosopher, mapping out how the investing world sees the real world, while at the same time questioning his own place in that world and how he can change it for the better. Ben Hunt, Co-Founder of Second Foundation Partners and creator of the Epsilon Theory blog, joins us on The Derivative, offering up his fresh perspective and novel insights into market dynamics. Today, Ben is sharing his knowledge on identifying narrative patterns, how to be authentic in the hedge fund world, new trading strategies, living on the “farm” (depending on whose definition), starting a software company, Tom King comic books, models based on narrative research, the market being a bonfire, returning investor $$, the beginning of Epsilon Theory, narrative maps, AI vs AP, the investing industrial complex, being authentic, FANG diminishing the narrative approach, aggregating N-95 masks & raising a million dollars for COVID, Ben’s affinity for goats, and the “game” of markets.

Take a look at a few examples of Ben’s narrative maps of all articles published on CNBC website, Central Bank Omnipotence, and building the narrative machine.

Chapters:

00:00-02:16 = Intro

02:17-27:55 = From a farm in Connecticut, Philosophy, to Figuring out “The Patterns”

27:56-51:40 = The Investing Industrial Complex, is the Market a Bonfire? Narrative Structure not Sentiment

51:41-1:03:28 = Dealer Gamma Hedging and Creating a Story

1:03:29-1:09:53 = N95 Masks - Let us feel Good about the world

1:09:54-1:15:39 =Favorites

Follow along with Ben Hunt on Twitter (@EpsilonTheory), the Epsilon Theory & Second Foundation Partners website, and connect with him Twitter on LinkedIn.

And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest.

dedicated to the improvement of both the investment industry and human-kind through the lens of authenticity and morality – and for that, we tip our hats.

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