The Derivative

There are not a lot of Florida Gator fans in Utah, just like there are few firms that move from high-frequency trading (HFT) into the mutual fund space. That's why Matthew Hanna from Teza Capital Management is here to talk us through what it is like running a systematic macro mutual fund. He reviews Teza's HFT and prop trading roots, how Teza’s algorithms approach the market, all while mixing his love for UF sports into the conversation. We also flip the script and ask the lead PM of the Catalyst/ Teza Algorithmic Allocation Fund (TEZAX) to dig deeper by covering some off-colored topics that viewers want to know more about, like the decision to pivot away from HFTs, why the Catalyst TEZA Algorithmic Allocation Fund essentially went flat for the first seven months of 2021, and how is Teza’s strategy doing now? Plus, we put Matt in the hot seat to provide his perspective on topics that nobody is talking about, or everyone is wrongly talking about. Highlights and topics from this episode include: How to determine what volatility is on a forward-looking basis and where risk models come into play The algorithmic allocation and breaking down the equity bucket Why absolute return in the alternative mutual fund space means low volatility and low return Why you need to adapt if stocks and bonds are down together over the next 16 months A closer look into the reality of why your model will work better sometimes than other times and the importance of allowing your volatility to float. Plus, more! Chapters:  00:00-01:42 = Intro 01:43-10:19 = Tim Tebow, Gator Sports, & Lawyer turned Quant PM 10:20-18:26 = High-Frequency Trading 18:27-34:36= The Algorithmic Allocation & Breaking down the Equity bucket 34:37-58:28= Multi-Model Methodology Approach / It's All About the Data 58:29-01:04:26= Hottest Take - NFL Hiring practices Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, 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 in Rome do as the Romans do?...Did they have convexity? They had the word, convexitas, and in this episode, we are joined by not one, but TWO brainiacs in the option and vol space, Devin Anderson and Zed Francis from Convexitas. Devin and Zed making noise in the derivative world by launching the first true discretionary, all separate account implemented, derivative manager into existence. Tune in as Devin and Zed talk us through constructing Convexitas, their long gamma tail liquidity strategy, why short deltas can often be better than long vega (volatility), including why and how logistics, design and structural impacts – including tax consideration – matter when choosing protection for your stock-heavy portfolio. We go on to ask where we are on the institutional vol selling popularity curve, and what’s wrong with some of the popular portfolio protection strategies such as the behemoth hedge equity program. We close out this episode with their hottest takes, where you'll want to listen to see who thinks The Beatles are overrated and who is a semi-pro shooter. Chapters: 00:00-00:55= Intro 00:56-24:25=  The first, true discretionary, all separate account implemented, derivative manager in existence 24:26-56:57= Tail Liquidity and “they can’t participate in that long gamma” 56:58-01:08:22= What’s smart money using to hedge? Is dumb money back on short vol side? 01:08:23-01:18:32= Tell us what’s wrong with the friendly neighborhood hedged equity program? 01:18:33-01:26:29= Hottest Take Highlights from this week's episode include: Learn how Convexitas designed its tail liquidity to reinvest capital during drawdown events and be the excess return driver Vol expansion and what happens when people are overpaying and all utilizing the same instruments to protect The different dynamics of hedgers reacting to where the market goes and how Convexitas responds What derivative managers get wrong when it comes to tax, why they shouldn’t bring institutional thinking into the family office and retail world, and how to understand the benefits of derivative investing, plus more! Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, 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

Now we’re cooking! We’re turning up the heat and bringing an abundance of flavor in this episode with a special guest who discusses venture capital, working capital, adds in a dash of e-sports and computer games, and sprinkles in being a rocket scientist. Dr. Chris Dark does it all, retiring at the age of 39, he continues to invest his family office across all asset classes, focusing on crypto, long-term out of consensus strategic plays, and allocating to external managers with specialist strategies. This leaves us with just one question, what can’t Dr. Dark do!? In this full force of a discussion, we're talking what it’s like to be a co-founder and executive at five companies (eSports, video games, trade finance, blockchain, venture capital), investment philosophies, Bitcoin, market structure & environmental impacts, and what it was like meeting a less famous Elon Musk and introducing the idea of space elevators. Plus, we play a little game of “What Would You Invest In?” Highlights from this week’s episode include: Why most venture firms don’t make it and how they’re missing one unique component- investing in things they like Why Bitcoin is such an important asset when volatility often increases as the price goes up How to disrupt banks, then do it again Understanding we’re in an interesting time with inflation,  even though it's undeniable that technology is a deflationary force Lessons from a serial entrepreneur, and more! Where Chris would invest $1k, $100k, and $1mm Chapters: 00:00-02:23 = Intro 02:24-14:29 = The Superconductors & eSports Super CV 14:30-28:57 = A Working Capital Marketplace & Venture Capital as an asset class 28:58-38:15 = Luck or Skill? & Avoiding the Entrepreneurial Trap 38:16-01:12:09 = Investment philosophies, Bitcoin, Market structure & Environmental Impacts 01:12:10-01:21:07 = Lithium, Uranium, Meeting Elon, and AI as Snake Oil 01:21:08-01:30:49 = What would you invest in? Additional Resources: Check out Dr. Dark After Dark here. Follow Chris on Twitter here. Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, 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 taking a trip across the pond to London in this episode and diving into the carbon markets and emissions trading with Michael Azlen, CEO and founder of Carbon Cap Fund and Management. Whether you care about making money off trending carbon emission prices, or saving the planet,  or both… Mike has become a leading voice for educating and explaining the role carbon emission credits and the emerging carbon futures markets play. In this episode, Mike breaks down the complex carbon concepts and answers some critical questions, like how do you trade carbon credits? What is an emissions trading system? Why is Europe the big player in this game? And he even gives us his hottest take in the market right now — we'll give you a slight hint, it involves climate change. Highlights from this week's episode include: The evolution of the U.S. and European Carbon Market Identifying and clarifying the difference between the voluntary carbon market and the compliance or regulated carbon markets (where Carbon Cap invests) How to think about a market that is structurally designed to increase in price Understanding how this market functions as a policy tool A closer look into Europe's carbon border adjustment mechanism And, how a hedge fund can make money and save the planet simultaneously —  you'll want to tune in for these details and more! Chapters 00:00-02:00 = Intro 02:01-12:38 = Wait? You can trade Emissions? What are Carbon Markets? 12:39-30:40 = Excess units vs Purchase units, Lowering Emissions, & Counter Party Risks 30:41-50:50 = Carbon Cap Mgmt and the Carbon Cap Fund 50:51-01:08:40 = Can we really Capture It? Climate Change, Natural Cycles & C02 levels 01:08:41-01:14:11 = Hottest Take More from this Episode: View World Carbon Fund - Generating Absolute Returns from Global Carbon Markets Visit Carbon Cap Management's website  Follow along with Michael Azlen on Twitter Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-up for our blog digest. And visit our sponsor, the CME Group at www.cmegroup.com to learn more about futures and options. 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 kickstarting the 2022 season of The Derivative with fan-favorite - Cem Karsan. In this episode, the FinTwit star better known as @jamcroissant and his calls on Gary and Gamma and Vol and Vanna, digs into the interesting 2021 Vol moves, what 2022 may look like in the vol space (not good…or good, depending on your positioning), how he actually trades flow and options in his KAI hedge fund, as well as a journey through all the things that make you go 'hmm.' Tune in as Cem also highlights the three trading strategies that make up his firm’s offerings,  a slightly different take on omicron, how he views the market’s movements as waves driven by flows, and more. Plus, as a bonus, you'll find out how Cem got stuck in a Bolivian salt flat!? Topics discussed in this episode include: How COVID accelerated a lot of trends in our lives, including the acceleration of VOL and VOL products Option volumes dwarfing the actual volume of the things that they are on top of and tracking What it means to have two-sided skew How to play Meme stocks, and more! Chapters: 00:00-01:32 = Intro 01:33-13:24 = Things that make you go Hmmm.. 13:24-26:00 = 2021 Vol Movements 26:01-43:15 = Proxy Hedges, Vol compression, Finding the pain points & Illiquid Markets 43:15-01:03:36 = KAI: Riding the Volatility Flow 01:03:37-01:16:05 = What’s in store for Vol in 2022? 01:16:06-1:22:22 = Two Truths & a Lie Additional resources discussed in this podcast: Vol Curves and Vanna Charm with Cem Karsan Wallstreet Bets Busts Wallstreet? WTF ^%$# with Cem Karsan and Kris Sidial Investing in Volatility & the VIX Whitepaper Follow Cem on Twitter Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-up for our blog digest. And visit our sponsor, the CME Group at www.cmegroup.com to learn more about futures and options. 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