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GM 78: The Market Risk Nobody’s Watching ft. Dave Dredge & Cem Karsan

61 snips
Jan 22, 2025
Join financial market expert Dave Dredge and seasoned trader Jim Kassan as they dissect today's volatile landscape and draw intriguing parallels to the late '90s. They delve into the surge of structured products and callable bonds, revealing the risks of relying on historical correlations in times of stress. Discussions also cover the implications of rising interest rates, the impact of geopolitical tensions, and innovative strategies for risk management. Gain insights on adapting investment approaches amid shifting dynamics and potential crises ahead.
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ANECDOTE

Japan's Impact and FX Convexity

  • Dave Dredge's key 2024 takeaway revolves around Japan's influence and FX convexity's cheapness.
  • The July rate hikes and Jackson Hole pivot triggered yen carry trade unwinds, impacting Japanese stocks and creating opportunities.
INSIGHT

Patience in Volatile Markets

  • Cem Karsan emphasizes the importance of patience in volatile markets, highlighting Dave Dredge's foresight on Japan.
  • Dredge's approach involved recognizing undervalued opportunities and building positions over time, demonstrating a valuable lesson.
INSIGHT

Gamma-geddon in Japan

  • The August events in Japan, dubbed "Gamma-geddon" by Dredge, were notable for large gamma payouts in equities.
  • While Dredge generally avoids gamma, attractive pricing in Nikkei index options proved profitable during this period.
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