The Derivative

Podshops, Prices, and Physical Flows: A Commodity Trading Framework with Stephane Bernhard of CAM/ETG

Apr 24, 2025

In this engaging conversation, Stephane Bernhard, CEO/CIO of CAM Multi-Strat Asset Management, shares insights from his 30+ years in commodity trading. He discusses the evolution of commodity trading and the importance of risk management, revealing why traditional VAR methods fall short. Stephane highlights his firm’s unique approach to merging physical and financial strategies in trading while tracing historical parallels in the market. Personal anecdotes from his experiences add depth to the discussion, making this a must-listen for trading enthusiasts!

01:29:34

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Stephane Bernhard

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Quick takeaways

Commodity trading has evolved significantly, driven by the interplay of physical markets and systematic trading strategies, reflecting broader structural changes.

Freight markets serve as a key indicator of global supply and demand, with their volatility offering strategic trading opportunities for informed traders.

Effective commodity trading relies on dynamic risk management approaches that adapt to market volatility and geopolitical factors to safeguard portfolio health.

Deep dives

Investment Cycles in Commodities

The discussion highlights the cyclical behavior of the commodities market, where underinvestment is often succeeded by overinvestment. Low volatility periods tend to create an environment where increased demand leads to heightened volatility as resources are stretched. This pattern plays a crucial role in understanding the commodity dynamics observed in recent years, indicating that current trends may still be in their early stages. The speaker suggests that these cycles are symptomatic of broader, structural changes within commodity investment strategies.

Intro

2min

From Commodities to Cityscape: A Journey through Europe

4min

Navigating the Volatile World of Freight Trading

2min

Navigating the Commodity Trading Landscape: A Career Reflection

6min

Navigating Commodity Trading Complexities

17min

Navigating Commodity Markets: Strategies and Challenges

22min

Strategic Dynamics in Commodity Trading and Investment

2min

Navigating Commodity Trading: Strategies and Risks

23min

Navigating Commodity Markets: History and Strategy

12min

In this episode, we dive deep into the world of commodity trading with Stephane Bernhard, CEO/CIO of CAM Multi-Strat Asset Management. Drawing from his 30+ years of experience starting at Louis Dreyfus through commodity trading house ETG, Stephane shares how commodity trading has evolved from pure fundamental analysis to today's complex intersection of physical, financial, and systematic trading.

The conversation explores the world of commodity houses and physical trading of commodities, before diving into CAM's unique approach to building a commodity-focused multi-strategy fund that bridges physical and financial markets. Stephane details their innovative risk management framework that gives commodity traders more flexibility than traditional pod shops while maintaining portfolio stability. You'll hear why VAR doesn't work for commodity risk management and how they've developed an anti-fragile approach to drawdown management.

Throughout the discussion, Stephane weaves in fascinating historical perspective - from his early days in the Madrid sovereign debt crisis to parallels between the end of Bretton Woods and today's shifting monetary landscape. Whether you're interested in commodity markets, multi-strategy fund construction, or the intersection of physical and financial trading, this episode offers unique insights into an increasingly important corner of the investment world – SEND IT!

00:00-01:06 = Intro

01:07-13:42 = Commodity Trading Houses: Bridging Time and Risk in Global Commodity Markets at Louis Dreyfuss and ETG

13:43-29:50 = Commodity Trading Dynamics: Navigating Physical Footprints, Basis Risk, and Market Complexity

29:51-40:51 = Constructing a Multi-Strategy Commodity Trading Platform: Exploring ETG's Strategic Vision

40:52-53:29= Commodity Market Dynamics: Weather, Volatility, and Global Supply Chains

53:30-01:13:51 = Risk Management and Trader Psychology: Mastering the Art of Commodity Trading

01:13:52-01:18:50 = Trading Psychology and Market Excitement: Navigating High-Stress Moments

01:18:51-01:29:34 = Lessons from the 1971 Gold Standard: Adapting to Historical Market Shifts

From the episode: The Secret Club That Runs the World

Follow along with Stephane on X @TCS_Trader and LinkedIn, and be sure to check out ETG and CAM on LinkedIn as well for more information!

Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠www.rcmalternatives.com/disclaimer⁠