Top Traders Unplugged UGO07: The Illusion of Safety: How Markets Became the Economy ft. Keith DeCarlucci, Patrick Kazley & Hari Krishnan
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Oct 22, 2025 Keith DeCarlucci, Chief Investment Officer of Melcart Macro Fund, discusses cross-asset derivatives and finds opportunity in emerging market FX. Patrick Kazley, President at One River Asset Management, dives into managing two-tailed market risks and questions the relevance of the 60/40 portfolio model. Hari Krishnan, author and derivatives expert, highlights AI's potential to reshape options trading but warns about its limitations in tail event modeling. Together, they explore the interplay of new intelligence and market instincts.
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Harvest EM Carry With Volatility Hedges
- Harvest carry and relative value in EM FX by pairing high local rates with volatility premia and hedging dollar exposure.
- Trade short-dated volatility and use option structures to monetize positioning flows while protecting against tails.
Collect Term-Structure Carry In Equity Vol
- Play relative-value in equity volatility by shorting longer-dated vols and buying shorter-dated convexity to capture carry.
- Hedge with front-end convexity and VIX term-structure hedges plus deep tail options for crisis protection.
One Pool: Beta Plus Levered Convexity
- Combine passive equity beta with actively leveraged, positively skewed strategies to create a single pool of capital that tolerates both tails.
- Use capital efficiency (convert equities to futures) to fund dynamic convexity hedges like VIX futures or S&P straddles.
