The Derivative

Today’s guest is one you’ve heard many times before if you’ve listened to The Derivative,  but may not necessarily know all that well. He’s and alts/managed futures veteran, having started his career in Chicago’s famed trading pits, founded a futures investment firm, and continued on to become a partner at RCM Alternatives. ,And, of course, when not doing his day job, steps in as the dynamic host of our podcast. We’re talking Jeff Malec. We thought today’s podcast would be a great opportunity to get him from behind the host side of the mic to the guest side to get a little more familiar with his background, have a chance for him to share some of his own knowledge, and for all our listeners to see a different side. It is his birthday afterall – so what better episode? Jeff is interviewed by the team at Mutiny Fund in today’s episode where they’re talking about the differences between the New York traditional equity-based markets and Chicago’s futures markets and the pros and cons for investors, why Chicago’s approach did much better in 2008 and what investors can learn from that to apply to their own portfolios as well as the cash efficiency of futures, how investors should think about correlations, the common traits of the most successful investors, and why low volatility often means hidden risk and how to spot it in your portfolio. *Please note - this was previously recorded and reposted for this episode* Chapters: 00:00-01:50=Intro 01:51-16:16=Harley Davidson & Philosophy 16:17-39:07=Chicago Futures vs New York Stocks 39:08-47:54=RCM Alternatives 47:55-01:03:17=Portfolio Construction 01:03:18-01:13:39=Gold What is it Good For Follow Jeff on Twitter at @AttainCap2. 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

COVID affected a lot of ways that we interacted with the world – it changed how we worked, how we socialized, how we entertained ourselves….and if you’ve been tuned into the markets over the past year, it also changed our expectations on how in the world Oil prices could have ever gone NEGATIVE. Last year this time we put out our “Crude Oil Goes Negative…WTF ^%$#?! Pod” and were talking with veteran trader Brent Belote about the sticky situation. In today’s episode, we brought Brent back on to take a walk down memory lane about how last year really happened, what’s changed over the year since, how oil traders are taking different approaches since then, and how is the industry ensuring that we don’t head back into the treacherous red zone. In addition to all of that, we’re also digging in further with Brent about his shift from NY to WY, demand bounce back (or lack there of) for oil, flashback to negative prices 1 year ago, the physicality of oil commodities, background on the oil markets, fly fishing, starting out at the JP Morgan desk, effects of COVID on the oil industry, alternative energy and electric cars, oil storage & capacities, and Cayler Capital’s continuing success. Chapters:  00:00-01:52=Intro  01:53-08:38=No Space & Plenty of Space  08:39-25:55=The Physical Oil Trader  25:56-40:15=Oil Goes Negative: One Year Later  40:16-01:00:30=The Cayler Models  01:00:31-01:11:05=Oil Inflation, Alternative forms of Energy & Drill/Collect  01:11:06-01:16:27=Favorites Follow Brent Belote on LinkedIn and Twitter and check out Cayler Capital’s 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. 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

*We apologize for potential audio issues with this episode – please see the transcript HERE or go to the episode blog on rcmalts.com to download.* NOPE - we’re not just going to be talking to our typical vol guest. NOPE – we’re not going over the usual trend following or strategy. NOPE we definitely (did) find today’s guest off of VolTwit. @nope_it’s_lily is Head Researcher at Salience Capital and the creator of NOPE (Net Options Pricing Effect), a proprietary metric used to measure the notional impact of options hedging on underlying liquidity. In addition to NOPE, we’re also talking with Lily about The Bay, PHDs, birth of NOPE from the market crash, Robinhood, GEX and squeezemetrics, bioinformatics and COVID-19, gamma, Salience Capital, and the future use cases for NOPE. Chapters: 00:00-02:04=Intro 02:05-11:45=Grad School & the Vaccine Pirate 11:46-27:28=Launching NOPE & The NOPE measurement 27:29-41:09=NOPE Products / Salience Capital 41:10-49:02=Liquidity in the Markets 49:03-53:25=What's next? 53:26-01:02:21=Favorites Follow along with Lily on Twitter and on her blog. 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

We’ve said it before and we’ll say it again – the opportunities in the Asian investment landscape are nuanced, emerging, and incredibly attractive. But on top of the excitement around the opportunities, there’s also gated access and a general list of unknowns that can make investors think twice; so, in this episode we’re joined by Alvin Fan, CEO of OPIM to check off the list of questions and give you more clarity on investing in the Asian markets.  Today, Alvin is giving you the inside scoop on OPIM, alternative investment demand, health hacks, manager standpoints from Asia, cap intro events, E/W <-> W/E investment opportunities, OPIM structure for investment opportunities, QFII updates, more hedge funds than Taco Bells, Chinese A-shares, futures markets in Asia, Clone Wars, growth of investor class, and the Asian investment landscape.  Sign up for OPIM’s Cap Intro event here. From the episode: Dell Stock Chart Chinese futures volumes getting big…like, a billion contracts big  And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, 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

The world of sports and finance have continually meshed together – and the Covid-19 pandemic has fast tracked that even further. Between the growth of analytics, to financiers making their way into the pro sports arena, I think we’re past a future where these two worlds will ever depart. Today’s guest is the culmination of these two worlds in one with the background (and family name) to prove it. Joe Pompliano, founder of Huddle Up – a daily newsletter breaking down the business and money behind sports – has joined us on The Derivative to talk about just that. We’re talking with Joe about his new venture – MVP ETF, team income sharing agreements, valuations ballooning, the billion-dollar athletes, analytics importance in sports & valuation, expansion teams, the entire Pompliano family, paying college athletes, hedge funds making their way into sports, growth of the eSports brand, and the beginning and expansion of the Huddle Up newsletter. Chapters: 00:00-02:21=Intro  02:22-12:36=A Fast Start with a Big Idea  12:37-21:19=The MVP ETF & Sports as Investment   21:20-41:54=Engaging the Fans, Expansion Losses, & Sports Revenue Impact from COVID  41:55-59:44= Athletes to Break a Billion & are they Worth the Payout?  59:45-01:18:47=Top Threads & Investing in Athletes  01:18:48-01:26:23=Favorites Follow along with Joe on Twitter and subscribe to his newsletter, Huddle Up, here. 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

How many families have two brothers who’ve been in the hedge fund game for 30+ years, much less on polar opposites of the long vol/short vol spectrum. We’re talking with the volatility loving, positive skew seeking brother in our episode today, Roy Niederhoffer. Roy is the founder and President of the eponymous R. G. Niederhoffer Capital Management, which has been coding, trading, analyzing, and investing in futures markets since before most of us had a future. We’re talking with Roy about 100-screen backdrops, delivering what’s best for the whole portfolio, not just the fund manager, crisis performance, predicting risk, short-term is the best “-term”, the start of RGN, jazz music, human bias (all the way to 100s of millions of years ago), superstars vs teamwork, the potentially huge difference between getting interest rate trend right and actually making money doing that, playing the lottery in reverse,  bitcoin/crypto performance in crisis, and building business around identifying similarities across asset classes. Chapters: 00:00-02:27= Intro 02:28-17:39=A Musical Dilettante’s path to Hedge Funds 17:40-29:19= Having a Short Vol Brother 29:20-49:20= The Flagship Strategy / My Job’s to Help the Whole Portfolio 49:21-58:11= Yield Curves, Bond Carry and Trend Following 58:12-01:11:28= Talking Sharpe Ratio’s, a Possible Rate Driven Crisis & Markets Moving Forward 01:11:29-01:17:21= Favorites Follow along with Roy and RGN 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. 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

When you hear news about artificial intelligence (AI), it might be easy to assume it has nothing to do with you. But if you use face recognition on your phone? Check. Google auto-fills your search bar? Check. And increasingly – the asset manager you may have managing your money is using some combination of machine learning and AI. Today’s guests were early adopters of that tech and applying it to trading algorithms. Jagdeesh Prakasam, Chief Executive Officer and Robert Rotella, Founder & Chairman of Rotella Capital Management have been in the game for a combined 50+ years. Today we’ll be getting into all the mechanics behind AI and Machine Learning as well as Robert’s beginning at Commodities Corp, mass customizing machine learning, how a lot can go right and a lot can go wrong in AI evolution, weak learners, early machine learning models, human bias in machine models, machine learning natural limits, systematic trend following, the balance of math and art in AI, Rotella’s models, and trying to stay on the leading edge of technology. Chapters: 00:00-02:39 = Intro 02:39-32:28 = Two Chemical Engineers Walk into the Trading World 32:29-48:16 = Rotella as a Whole 48:17-01:08:20 = Digging into the Models & Flight to Safety 01:08:21-01:18:10 = Q-Deck 01:18:11-01:35:15 = Machine Learning & A.I. 01:35:16-01:39:48 = Favorites Check out the COVID 19 charts mentioned in the podcast and follow along with Rotella Capital Management here. 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

Forget fat tails, left tails, even tall tales. We’re going into extracting value from long tails of the distribution on the pod in this episode. Vineer Bhansali is a 29-year industry veteran, previously at PIMCO, a Forbes columnist, author of four books on finance, and is currently the founder and CEO of longtail alpha. In today’s episode, we’re talking with Vineer about abstract physics = finance, what constitutes a tail event, negative yielding debt, identifying outlier risks, option-based trend following framework, bond temper tantrums, the start (& current work) of LongTail Alpha, is it the monetization is getting quicker = shorter lived or is it shorter lived = quicker monetization?, figuring out the known unknowns of market nature, and including asset prices in inflation. Chapters: 00:00-02:23=Intro 02:24-17:33=Physics to Finance & Risky Recreation 17:34-35:06=Action in the Tails 35:07-42:09=Monetization 42:10-58:38=Negative Yield & Debt – How it Could End 58:39-01:12:06=Inflation Protection & Identifying Future Tail Events 01:12:07-01:01:18:23=Favorites Follow along with Vineer on Twitter and check out LongTail Alpha’s strategies here. Buy Vineer’s books here. 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

The king of Commodities has entered The Derivative ring. You know his name, you’ve read his books, you’ve probably utilized his index, and now you’re listening to him in this most recent podcast episode. Jim Rogers is an American investor and financial commentator and was there at the start of the Quantum Fund and Soros Fund Management. In today’s episode, we’re talking with Jim about peanut sales, commodity supercycles, global debt reset,  creation of the RICI, reweighting for renewables, commodities vs commodity companies, Jim’s ability to identify the next world trend, Guinness Book of World Records, Chinese commodities, preferring shares of Google over Gold, potential of innovation outpacing demand, Hot Commodities 1998 vs 2021, cross country trips, probability of a Chinese supercycle, and Jim’s thoughts about the next bear market and market dislocation being the worst we’ve ever seen. Chapters: 00:00-02:02 = Intro 02:03-15:35 = An Extraordinary Background 15:36-39:57 = COMMODITIES: Indexes, Energies & China    39:58-59:27 = Money Printing, Simple Observations & Global Debt Reset 59:28-01:06:49 = Now & Then: Comparing & Contrasting Commodities 01:06:50-01:16:25 = Favorites Check out this list of Jim’s books (translated into many languages) and read up on all of his interesting stories here. 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

We’re bringing out the cake & ice cream for this pod because it’s The Derivative’s 1 year anniversary! If you’ve been with us since the beginning – you may fondly remember our inaugural episode The Human Behind The Hedge Fund with Wayne Himelsein. So, in today’s episode, we brought back Wayne, President and Chief Investment Officer at Logica Capital Advisers, and as a special anniversary bonus – his business partner Michael Green, Chief Strategist at Logica.  We’re talking with Mike and Wayne about running a hedge fund and helping clients through the trials and tribulations of 2020, the “two star” problem, Twitter fitting into the business model, straddling volatile calls, inception of the Iron Man (Wayne) and Captain America (Mike)partnership, dynamic of the macro overlay logic, value vs momentum, staying power of the Wall Street Bets model, COVID due diligence, and failure not being part of the Logica vocabulary. Chapters: 00:00-02:25 = Intro 02:26-22:44 = One Year Anniversary! 22:45-39:35 = Value vs Momentum – when the system needs to breathe / Noise Traders 39:36-50:45 = The Tony Stark/ Captain America Dynamic  50:46-58:58 = The Two-Star Problem 58:59-01:09:05 = Hard-Hitting Tweets 01:09:06-01:21:04 = Favorites Follow along with Mike (@profplum99)and Wayne (@WayneHimelsein) on Twitter and check out the Logica Capital Advisers website. Check out our past episode with Wayne here; and our past episode with Mike here.  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