Blog Posts

Our brains do a poor job of processing exponentiation. But exponents and non-linearities are a big part of trading, investing, and financial markets. As a trader, your job involves assessing reward relative to risk and getting the former as high as possible relative to the latter and risk as low as possible in an absolute […]

After the large drop in oil, it’s prompted the question: can oil prices go negative? On the surface, oil should always have some residual value. It’s the world’s most important commodity. So it’s commonly assumed that oil must have some type of floor price. However, there is no reason why crude oil prices can’t go […]

The uranium market is much smaller than gold, silver, and other traditional commodity markets. The buying and selling of uranium typically occurs among utility firms with nuclear power plants, mining companies, specialist traders, and a small number of hedge funds and institutional investors.  Money managers, however, are increasingly looking to get into more abstruse markets […]

Every now and then, short selling is top of mind in the financial media, whether from the optics of some people making money during a bad market downturn, management teams complaining about short sellers (e.g., Tesla/Elon Musk), or speculative manias in meme stocks like Gamestop and AMC.  There are many widespread misconceptions of short selling […]

The rise of meme stocks such as Gamestop (GME) and AMC Entertainment Holdings (AMC) created not just a frenzy of activity in the shares themselves but also their options markets. The boom in meme stocks options trading has resulted in a burst in activity across the entire options landscape, particularly among retail traders.   Options […]

Cryptocurrency vs. stocks really has its root in where we are in the global debt cycle, fiscal and monetary policy, money, credit, and the role of the dollar and other reserve currencies going forward.  The short answer in the cryptocurrency vs. stocks debate is that they’re both viable as stores of value to grow and […]

In basic terms, the cross currency basis is a measure of the relative shortage of a certain currency in the market relative to its demand. Cross currency basis swaps reflect this relative shortage and work as a type of currency hedge, or a type of hedge on a broader global portfolio.  The premium or discount reflected […]

The largest differences in policy are not seen between developing countries, but among emerging countries. This is driving movements in emerging market FX.  Emerging market are running tighter policies Emerging markets as a whole are running much less easy monetary policy, lower budget deficits relative to output, and are generally trying to keep sound currencies […]

The basic idea behind the merging of fiscal and monetary policy is to get the inflation rate up in an economy. The basic premise driving asset allocation in a rising inflation environment is that assets with fixed returns get squeezed and become less attractive. Other types of assets are needed to provide inflation protection. Let’s […]

Could bitcoin replace the dollar and undermine the United States? Bitcoin could have some role as a store of value and perhaps some type of transactional utility. Some, like Peter Thiel, have asserted that cryptocurrencies are a type of threat to sovereign fiat currencies.  A country will always want to control all the money and […]