Trader Chats

Q2 ROUNDTABLE - Macro Risks, Signals to Watch & How to Hedge

Special guests Darius Dale (42Macro), Brent Kochuba (Spotgamma) and Alf Peccatiello (Macro Compass) join Imran Lakha, founder of Options Insight, for this special edition Q2 Roundtable discussion. 

With so many macro headwinds facing markets after a difficult and volatile Q1 2022, we thought people needed guidance on how to navigate into the months ahead. So, we brought in the big guns! These guests are all experts in their field and have built up their knowledge and experience in markets over decades.

The core topics that were discussed include:-

Macro risks going into Q2 and the volatility landscape

What signals to monitor to either confirm or disconfirm our views

How to hedge and position to protect and preserve capital in what is shaping up to be a rough year for risk assets

With two macro experts and two options experts they covered a lot of bases and had an in-depth conversation that listeners will hopefully find educational and informative.

 

Please give us your feedback and comments​!

 

DISCLAIMER OPTIONS INSIGHT CONTENT is presented for educational purposes only. The information presented by OPTIONS INSIGHT should NOT be construed as investment advice. Always consult a licensed investment professional before making important investment decisions. The opinions expressed by OPTIONS INSIGHT are those of its founder Imran Lakha who shall NOT be liable for losses resulting from investment decisions based on information or viewpoints presented by Options Insight.

Ep 3. Bond Markets -Signal or Noise?

In this episode Imran Lakha, founder of Options insight, talks to Hussein Nasser, an ex-bank bond and credit trader with 20 years in the industry.

They discuss Hussein’s background in markets and all the products that he has been exposed to in his impressive career. Imran quizzes him on whether bond traders really have a better handle on the economy than stock investors and how much signal remains in markets prices after the introduction of QE and the distortions that creates in both treasuries and credit markets.

Hussein gives a quick explanation of how the repo market works and why the FED’s repo facility gets used so extensively by banks. Now that Nasser trades for himself an has left banking, they discuss how he found that transition and what type of trades he is doing now to extract value from the market.

To learn more about OPTIONS INSIGHT please visit www.options-insight.com or email enquiries@options-insight.com

 

NONE OF THE MATERIAL IN THIS PODCAST SHOULD BE CONSIDERED AS INVESTMENT ADVISE, IT IS FOR INFORMATIONAL AND ENTERTAINMENT PURPOSES ONLY. ALWAYS CONSULT A REGISTERED INVESTMENT PROFESSIONAL BEFORE MAKING INVESTMENT DECISIONS. THE VIEWS AND OPINIONS EXPRESSED ON TRADER CHATS ARE THOSE OF THE PARTICIPANTS AND DO NOT NECESSARILY REFLECT THOSE OF THE HOST. OPTIONS INSIGHT OR IMRAN LAKHA SHALL NOT BE LIABLE FROM LOSSES RESULTING FROM INVESTMENT DECISIONS BASED ON INFORMATION OR VIEWPOINTS PRESENTED ON TRADER CHATS.

Ep 2. Tracking Bitcoin Cycles

In this episode Imran Lakha, founder of Options Insight, talks to Kuda Chinhara, an experienced options trader and technical analysis expert.

 

Since last speaking to Kuda about his approach to reading the charts through analysing cycles, identifying market regimes and then using Fibonacci confluence to find inflection levels, Kuda has been looking more closely at the price history of Bitcoin.

 

They discuss the spectral analysis that Kuda uses to try to find dominant cycles in the momentum oscillator of the Bitcoin time series. This quantitative approach, whilst not necessarily statistically significant due to the small sample size (only 12 years of history) has led to some interesting observations about the cyclical nature of Bitcoin.  When people typically discuss bitcoin cycles they talk about the 4 year halving cycle which is an inherent part of it’s code and how it’s mined into existence, but Kuda’s work shows something quite different.

 

Finally, they speculate on what a repeat of this cycle means for the potential price swings in Bitcoin over the coming year and the type of scenarios that crypto investors should be preparing themselves for in what could be an epic year with extreme volatility.

 

To view the charts discussed in this podcast please visit:

https://kudakwashe-chinhara.medium.com

 

Or watch the video cast on my YouTube Channel:

https://www.youtube.com/channel/UCUH8lZPntiP1BclATjVBKYQ

 

 

To learn more about OPTIONS INSIGHT please visit www.options-insight.com or email enquiries@options-insight.com

 

 

NONE OF THE MATERIAL IN THIS PODCAST SHOULD BE CONSIDERED AS INVESTMENT ADVISE, IT IS FOR INFORMATIONAL AND ENTERTAINMENT PURPOSES ONLY.  ALWAYS CONSULT A REGISTERED INVESTMENT PROFESSIONAL BEFORE MAKING INVESTMENT DECISIONS. THE VIEWS AND OPINIONS EXPRESSED ON TRADER CHATS ARE THOSE OF THE PARTICIPANTS AND DO NOT NECESSARILY REFLECT THOSE OF THE HOST.  OPTIONS INSIGHT OR IMRAN LAKHA SHALL NOT BE LIABLE FROM LOSSES RESULTING FROM INVESTMENT DECISIONS BASED ON INFORMATION OR VIEWPOINTS PRESENTED ON TRADER CHATS.

Ep 1. Heavyweight Macro Trading

In the episode Imran Lakha, founder of Options Insight, talks to Shrenick Shah, a head macro portfolio manager at a major asset management firm.

They met at LSE university, more than 20 years ago, and both began their career in equity derivatives at top tier investment banks.

Since then, Shrenick has moved on to the buy side, where he leads a team of macro PMs.  They discuss Shrenick’s macro framework, key drivers such as growth, inflation, sentiment and liquidity.  They also explore the idea of trading across multiple durations and the way to diversify or hedge risk with either volatility products or alternative asset classes.

Imran quizzes Shrenick on his views around crypto and how the established asset management community feels about this emerging asset class.

Finally, they touch on the main question for asset allocators in 2022, will we see inflation or deflation as we get into the second half of the year and what should a robust portfolio look like.

 

To learn more about OPTIONS INSIGHT please visit www.options-insight.com or email enquiries@options-insight.com

 

 

NONE OF THE MATERIAL IN THIS PODCAST SHOULD BE CONSIDERED AS INVESTMENT ADVISE, IT IS FOR INFORMATIONAL AND ENTERTAINMENT PURPOSES ONLY.  ALWAYS CONSULT A REGISTERED INVESTMENT PROFESSIONAL BEFORE MAKING INVESTMENT DECISIONS. THE VIEWS AND OPINIONS EXPRESSED ON TRADER CHATS ARE THOSE OF THE PARTICIPANTS AND DO NOT NECESSARILY REFLECT THOSE OF THE HOST.  OPTIONS INSIGHT OR IMRAN LAKHA SHALL NOT BE LIABLE FROM LOSSES RESULTING FROM INVESTMENT DECISIONS BASED ON INFORMATION OR VIEWPOINTS PRESENTED ON TRADER CHATS.

Ep 8. Traders Who Teach

In this episode Imran Lakha, founder of OPTIONS INSIGHT, talks to Debodun Osekita, founder of Stock Pickers Academy.

 

“Debs” has been a trader for 12 years and has worked for investment banks such as Goldman Sachs and Barclays Capital.  He now runs a trading and investing educational service to help members of his community learn how to invest for the long term using techniques that he has learned over his successful career.

 

In this conversation, the two trading mentors discuss what drives their passion for teaching and how building communities actual benefits them and helps them grow as traders and investors.  Keeping an open mind and being able to learn from his students, has helped Debodun identify when to change up his own trading strategies.

 

The impact of ones personality on their trading style and what may be your “edge” are topics they cover.  Also, watching out for some red flags that may steer people away from so-called experts or trading educators that are offering guaranteed returns or unwilling to demonstrate their track record.

 

One clear message that come from this trader chat is that even if you are a teacher with thousands of students, when it comes to trading, you never stop learning!

 

 

 

To learn more about OPTIONS INSIGHT please visit www.options-insight.com or email enquiries@options-insight.com

 

 

NONE OF THE MATERIAL IN THIS PODCAST SHOULD BE CONSIDERED AS INVESTMENT ADVISE, IT IS FOR INFORMATIONAL AND ENTERTAINMENT PURPOSES ONLY.  ALWAYS CONSULT A REGISTERED INVESTMENT PROFESSIONAL BEFORE MAKING INVESTMENT DECISIONS. THE VIEWS AND OPINIONS EXPRESSED ON TRADER CHATS ARE THOSE OF THE PARTICIPANTS AND DO NOT NECESSARILY REFLECT THOSE OF THE HOST.  OPTIONS INSIGHT OR IMRAN LAKHA SHALL NOT BE LIABLE FROM LOSSES RESULTING FROM INVESTMENT DECISIONS BASED ON INFORMATION OR VIEWPOINTS PRESENTED ON TRADER CHATS.

Ep 7. Quant Driven Asset Allocation

In this episode Imran Lakha, founder of Options Insight, talks to Darius Dale, founder of 42 Macro.

Darius started his career at Hedgeye Risk Management, conducting macro research by building quantitative models based around identifying the growth and inflation regimes of global markets.

Using this approach and backtesting cross-asset returns against the 4 regimes (the GRIDs), he helps investors navigate the market with robust portfolio construction and risk management.  Being data driven and multi-factor, allows him make investment decisions without bias and be honest about what the market is telling him.  They use the analogy of needing both the “weather forecast” (market price signals) and a “map” (macro regime forecasting) to get to your destination safely. 

They discuss the volatility signals that 42 Macro uses to help identify when markets may be stretched in one direction or another, the VIX/VVIX ratio which is a key metric that Darius uses and how incorporating SKEW moves could enhance the model even further in the future.

Finally, they talk about the current macro environment and how equity markets and bond markets seem to be signalling quite different market regimes with equities focussed on the short term, whereas bonds are looking further into the future where growth headwinds are highly likely to materialise.

To learn more about OPTIONS INSIGHT please visit www.options-insight.com or email enquiries@options-insight.com

 

 

NONE OF THE MATERIAL IN THIS PODCAST SHOULD BE CONSIDERED AS INVESTMENT ADVISE, IT IS FOR INFORMATIONAL AND ENTERTAINMENT PURPOSES ONLY.  ALWAYS CONSULT A REGISTERED INVESTMENT PROFESSIONAL BEFORE MAKING INVESTMENT DECISIONS. THE VIEWS AND OPINIONS EXPRESSED ON TRADER CHATS ARE THOSE OF THE PARTICIPANTS AND DO NOT NECESSARILY REFLECT THOSE OF THE HOST.  OPTIONS INSIGHT OR IMRAN LAKHA SHALL NOT BE LIABLE FROM LOSSES RESULTING FROM INVESTMENT DECISIONS BASED ON INFORMATION OR VIEWPOINTS PRESENTED ON TRADER CHATS.

Ep. 6 The Importance of Positioning

In this episode Imran Lakha, founder of OPTIONS INSIGHT, talks to Brent Kochuba, founder of Spotgamma.

 

Brent has been an options trader for many years working on both the sell-side as a market-maker and on the buy-side for a family office.  He setup Spotgamma two years ago to provide data on options market positioning in equity markets and his models have become an almost must have for derivatives traders in the industry.  

 

In this conversation, they discuss why positioning matters so much for trying to predict short term moves in markets and how these can be amplified when options get involved.  An obvious example is the dramatic impact of options flows on the some of the recent "gamma squeezes" in meme stocks such as Gamestop and AMC, which Brent monitors closely in his models. 

 

They discuss some of the embedded assumptions in Brent's model, and how overlaying the skew of the volatility surface over gamma open interest can help to identify dealer positioning and also predict the impact of large expiries on the underlying stocks or indices.

 

Finally, they touch on crypto markets and whether positioning data is as readily available or as predictive in the still relatively new market.

 

To learn more about OPTIONS INSIGHT please visit www.options-insight.com or email enquiries@options-insight.com

 

 

NONE OF THE MATERIAL IN THIS PODCAST SHOULD BE CONSIDERED AS INVESTMENT ADVISE, IT IS FOR INFORMATIONAL AND ENTERTAINMENT PURPOSES ONLY.  ALWAYS CONSULT A REGISTERED INVESTMENT PROFESSIONAL BEFORE MAKING INVESTMENT DECISIONS. THE VIEWS AND OPINIONS EXPRESSED ON TRADER CHATS ARE THOSE OF THE PARTICIPANTS AND DO NOT NECESSARILY REFLECT THOSE OF THE HOST.  OPTIONS INSIGHT OR IMRAN LAKHA SHALL NOT BE LIABLE FROM LOSSES RESULTING FROM INVESTMENT DECISIONS BASED ON INFORMATION OR VIEWPOINTS PRESENTED ON TRADER CHATS.

Ep 5. From Banking to De-Fi

In this episode Imran Lakha, founder of Options Insight, talks to Anders Armelius, an ex-bank equity derivatives strategist.

 

After spending a large part of his career working in traditional finance, Anders has now thrown himself into the world of De-fi.

 

They discuss what De-fi means and how this new growing industry may disrupt the traditional banking system.

 

Anders explains how he screens the large universe of De-fi tokens for excess yield and incentives that sometimes only last for a few months, effectively arbitraging protocols desperation to attract capital.

 

They discuss the risks involved in investing or trading in this space and ways that some of the risk can be managed. 

 

Finally Imran draws parallels to the credit markets in traditional finance, suggesting that this budding new area is just a "new age” version of high yield credit which needs to offer very high returns that reflect the risk involved to attract capital.

 

 

To learn more about OPTIONS INSIGHT please visit www.options-insight.com or email enquiries@options-insight.com

 

 

NONE OF THE MATERIAL IN THIS PODCAST SHOULD BE CONSIDERED AS INVESTMENT ADVISE, IT IS FOR INFORMATIONAL AND ENTERTAINMENT PURPOSES ONLY.  ALWAYS CONSULT A REGISTERED INVESTMENT PROFESSIONAL BEFORE MAKING INVESTMENT DECISIONS. THE VIEWS AND OPINIONS EXPRESSED ON TRADER CHATS ARE THOSE OF THE PARTICIPANTS AND DO NOT NECESSARILY REFLECT THOSE OF THE HOST.  OPTIONS INSIGHT OR IMRAN LAKHA SHALL NOT BE LIABLE FROM LOSSES RESULTING FROM INVESTMENT DECISIONS BASED ON INFORMATION OR VIEWPOINTS PRESENTED ON TRADER CHATS.

 

Ep 4. Why Leave Banking?

In this episode Imran Lakha, founder of Options Insight, talks to Anh Nguyen, an independent prop trader and ex-Citibank EM derivatives flow trader.

 

They discuss how they met at Citibank in 2013, half way through Anh’s career and how his interest in proprietary trading was peaked.

 

Delving into the different skills required to be a successful flow or prop trader and how the role changed after regulation from the 2008 financial crisis.  They talk about the technical and psychological aspects of trading and how dropping the ego was what allowed Anh to grow into a successful trader.

 

Anh gives his reasons for choosing to leave what most would consider a lucrative career in search for something more fulfilling, that allowed him to grow his skill set and follow his passion for coding and systematic algorithmic trading.  

 

To learn more about OPTIONS INSIGHT please visit www.options-insight.com or email enquiries@options-insight.com

 

 

NONE OF THE MATERIAL IN THIS PODCAST SHOULD BE CONSIDERED AS INVESTMENT ADVISE, IT IS FOR INFORMATIONAL AND ENTERTAINMENT PURPOSES ONLY.  ALWAYS CONSULT A REGISTERED INVESTMENT PROFESSIONAL BEFORE MAKING INVESTMENT DECISIONS. THE VIEWS AND OPINIONS EXPRESSED ON TRADER CHATS ARE THOSE OF THE PARTICIPANTS AND DO NOT NECESSARILY REFLECT THOSE OF THE HOST.  OPTIONS INSIGHT OR IMRAN LAKHA SHALL NOT BE LIABLE FROM LOSSES RESULTING FROM INVESTMENT DECISIONS BASED ON INFORMATION OR VIEWPOINTS PRESENTED ON TRADER CHATS.

Ep 3. Can Trading Skills Save Lives?

In this episode Imran Lakha, founder of Options Insight, talks to his friend an experienced hedge fund trader named Shabs about an episode in his personal life where his trading background helped him cope under extreme pressure.

In early 2011, Shabs’s father was taken into a hospital in India and put on life support due to a serious respiratory condition. In this discussion he talks us through how he was able to maintain clarity of thought, despite the extreme emotions at play, by having a decision making process based on quantifiable data markers. This process allowed him and his family members to evaluate clearly whether or not decisions were being made in a rational way and if their father’s chances of survival were maximised.

 

Judge for yourself, but we conclude in this example TRADING SKILLS CAN SAVE LIVES!

 

To learn more about OPTIONS INSIGHT please visit www.options-insight.com or email enquiries@options-insight.com

 

 

NONE OF THE MATERIAL IN THIS PODCAST SHOULD BE CONSIDERED AS INVESTMENT ADVISE, IT IS FOR INFORMATIONAL AND ENTERTAINMENT PURPOSES ONLY.  ALWAYS CONSULT A REGISTERED INVESTMENT PROFESSIONAL BEFORE MAKING INVESTMENT DECISIONS. THE VIEWS AND OPINIONS EXPRESSED ON TRADER CHATS ARE THOSE OF THE PARTICIPANTS AND DO NOT NECESSARILY REFLECT THOSE OF THE HOST.  OPTIONS INSIGHT OR IMRAN LAKHA SHALL NOT BE LIABLE FROM LOSSES RESULTING FROM INVESTMENT DECISIONS BASED ON INFORMATION OR VIEWPOINTS PRESENTED ON TRADER CHATS.