Category: Alternative Investment Strategy

Innovation is a key differentiator between traditional markets and futures markets. Exchanges, FCM, and industry personnel try to predict not only prices going forward but how people will trade in the decades to come. The CME, CBOE, and others demonstrate their desire to develop new ideas every year. Adding new contracts to include developing commodities, […]

As one of the world’s largest databases of futures traders, we see more strategies and talk to more managers in the asset class than almost anyone. We also speak with thousands of investors each year looking to improve their portfolios. These conversations over the past two decades give us great insight into what investors say […]

Two components often drive the evaluation of an investment decision in the futures world—the viability and strength of a program and the capability of a trader to execute that strategy. Recently, a marketing email from a new manager showed incredible returns, an interesting commodity, and over a year of track record. In short, the type […]

In the 1996 book “The Millionaire Next Door,” authors Thomas Stanley and William Danko set out to find wealthy individuals and learn what a typical one looks like. They began by searching ZIP codes of the most prosperous areas only to be shocked to find that while many of these individuals displayed the trappings of […]

In a comeback for the ages, the United States elected Donald Trump as its 47th President. His path to redemption seemed unlikely when he left office just four years ago, having faced two impeachments and multiple criminal indictments for issues related to handling classified information, falsifying business records, obstructing an official proceeding, and racketeering, to […]

A common question we received in the futures industry is what happens if an event occurs when the market is closed and we get stuck in a position when it re-opens. It is a good question, particularly with our 24-hour-a-day news cycle in which economic and geo-political events happen at an ever-increasing pace. The implication […]

Much like cash-strapped Americans, the US government runs like a household on the edge. Rather than match incoming revenues with spending priorities, it uses its credit to make the minimum monthly payment. Fortunately, their income goes up almost all the time due to the hard work and ingenuity of its citizens. This will change at […]

The stock market is at all-time highs, inflation is supposedly contained, unemployment reflects what is arguably considered full employment, and yet the Fed is cutting rates. Is the economy healthy or not? Despite massive government stimulus, the risk still exists, and the good news is that we can identify areas of concern. The bad news […]

Futures traders often do their best in discrete periods of significant market movements. So-called “Fat Tail Events” in a normal distribution happen more than statistics suggest. This observance documented in the Nassim Taleb bestseller “The Black Swan” posits that people underestimate the likelihood of crisis conditions. While nobody predicts these events well, we can identify […]

Black box trading sounds mysterious and scary for many. Tall tales of machines running amok or making mistakes that wipe out accounts make for good movies, but the reality is often much simpler. All good traders use rules to provide structure to their trading. This helps regulate emotions so they can make decisions quickly under […]

An esoteric trade caused dramatic sell-offs in the equity markets this month. A surprise rate increase by the Central Bank of Japan (BOJ) tipped over a complex set of dominoes, resulting in a 165% daily spike in the VIX contract in the United States and a 10% drop in the S&P over just a few […]

Much like my children would love to eat nothing but desserts, consumers prefer spending power with few limits that come with low interest rates. Thus, we see the shock from the talking heads on CNBC and other investment channels when central banks tighten. Sugar and cheap borrowing both create addiction, and both can also lead […]

Alternative investments changed more since I started in the industry in 2008 than I ever thought possible. One might think that the “AI Revolution” or more sophisticated computer power created a vast array of totally different return profiles, but instead, the big surprise is the ability for everyday investors to access non-traditional products. While regulators […]