4min chapter

Flirting with Models cover image

Doug Greenig - At the Frontier of Trend Following

Flirting with Models

CHAPTER

The Role of Speculators in Alternative Markets

Given the operational difficulty in accessing some of these markets, I suspect that it might actually change the nature of the players in those markets. Can you talk a little bit about how that composition changes in these alternative markets versus traditional markets and how that may create opportunities or challenges? Yeah, that's another good question. We have 500 markets of things like steel rebar in China, South African maize, Malaysian palm oil, French electricity, California carbon emissions. And you can see that a lot of them have very little correlation to one another,. So you get that diversification. The other thing that you get with these markets is you tend to get a better ratio of directional movement to meaningless chop.

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