Ben Hoff, Global Head of Commodity Strategy at Société Générale, dives into the fascinating world of commodities, highlighting their unique duality of physical and financial markets. He explains how real-world frictions like storage and transport shape volatility and risk, contrasting it with equities. Ben also discusses the implications of market shocks, such as the 2020 negative WTI incident, and illustrates his commodity risk absorption analogy using CDO structures. Furthermore, he tackles the complexities of financialization and the structural differences in volatility risk premiums.
