SI219: The Impact of Secular Inflation ft. Cem Karsan

Today, Cem Karsan joins us for our weekly conversation on Volatility & Trend Following, where we discuss the inverted yield curve and how to protect yourself against secular inflation, how Cem foresee the coming period in terms of Opex, Delta hedging, Vanna etc. and the potential bottom of the markets. We also discuss the importance of the outcome of the U.S election and positive CPI numbers and how it affects volatility, why short term volatility might increase and longer term might compress and how it has changed the way Cem trade. Finally we dive into how the ultra low skew has created a dangerous situation for the economy and when the situation might turn back to normal, how inflation affects risk premia and much more.

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Episode TimeStamps:

00:00 - Intro

01:52 - What happened this week?

07:22 - Q1, Dave: What’s up with the inverted yield curve?

11:24 - Q2, Eron Musk: Cem’s opinion on hedge fund redemption dynamics?

14:21 - Q3, John: Cem’s forecast for the next 4 weeks (Dec. opex)?

16:25 - Q4, JZone: Crude put vs recession? Is the 20d sma and standard deviation all that matter for TF? Probability of right tail risk that China plays ball? National interests vs. economic prosperity

18:12 - Q5, The Slaughter79: Forecast for Opex-deltahedging-gamma-vanna-charm stuff?

18:39 - Q6, Spek: What’s the SP500 potential bottom?

22:47 - The U.S election and positive CPI numbers

30:11 - Asset classes in secular inflation

38:15 - Change in volatility = change in trading strategy?

46:51 - The impact of low skew

57:30 - When are we coming back to normal?

01:02:05 - Liquidity and volatility in relation to bonds

01:08:35 - Thanks for listening

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