OI20: Why Commodities Refuse to Trend Forever ft. Doug King
Top Traders Unplugged
Avoiding fads: futures momentum without cash follow-through
Doug describes resisting futures-driven rallies (e.g., copper) until physical basis and flows confirm the move.
Moritz Siebert speaks with Doug King about what it really means to trade commodities through cycles, distortions, and stress. Drawing on decades at Cargill and more than twenty years running a commodities hedge fund, Doug explains why innovation keeps scarcity narratives in check, why commodities resist buy and hold logic, and how real edge comes from cash markets rather than futures screens. He reflects on defining trades in oil, nickel, and agriculture, the limits of volatility targeting, and the discipline required to survive violent squeezes. The result is a grounded account of conviction, risk control, and why commodities reward patience more than prediction.
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Episode TimeStamps:
00:00 - Opening remarks and introduction to Top Traders Unplugged
01:24 - Introducing Doug King and his background
04:49 - From Cargill to hedge funds and the pull of commodities
07:05 - Why the fund is purely discretionary and fundamentals driven
09:50 - Team size, selectivity, and waiting for the right trades
10:45 - Why commodities are cyclical and innovation breaks scarcity
13:46 - Electrification and where long term excitement may lie
15:37 - Defining edge in commodities trading
18:12 - Physical delivery, convergence, and real market signals
20:23 - Concentration, themes, and risk limits
22:34 - Risk budgets, drawdowns, and volatility control
26:35 - Margin stress, squeezes, and market dysfunction
30:43 - Defining trades in oil and nickel
35:54 - Linking physical trading to hedge fund insight
43:00 - Discipline, noise, and surviving as a commodity trader
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