Insider Talks – August 2019

Published on
August 8th, 2019
Duration
43 minutes

Insider Talks – August 2019

Featuring Raoul Pal, Julian Brigden

Published on: August 8th, 2019 • Duration: 43 minutes

The last week has seen a clear escalation in trade tensions (and Fed impotence). A soft landing is less likely, but central bank activity is being turned up another notch. Raoul and Julian debate the likelihood of global rates convergence (toward zero), the outlook for the dollar and the great opportunity across the precious metals complex. Filmed on August 6, 2019.

Comments

  • DD
    Derek D.
    10 September 2019 @ 19:49
    Stopping the dollar rally would be the napalm run on what's left of the American middle/working class. Euphemism for white people, so of course all the elites are happy to crush them.
    • DD
      Derek D.
      10 September 2019 @ 19:55
      No. More. Reflation. We're slowly choking our people to death, and every reflation prevents any reckoning with debt and malinvestments.
  • sB
    sylvain B.
    16 August 2019 @ 09:44
    Hey Julian is the big short the ASX200? the way i see it this market is close to 2007 all time high full of banks and mining names. With economy going slow, rate going down (bad for banks) copper, Iron Ore breaking down and china going down the drain, i dont see the index holding up in the air all alone for much longer.
  • RM
    R M.
    8 August 2019 @ 18:00
    Great conversation! Julian, really interested in hearing your new trade. For those of us who aren't very knowledgeable in futures, the metals trade is so much easier to put on and manage (1345 stop, per Julian) than the Euro$ trade. I spoke to three different (large) brokers on purchasing options on the Eurodollar (per Raoul) and it was a "not available" trade (one broker actually asked me to explain what Euro$ are). So I am definitely interested in hearing from Raoul and the MI community what broker they used to actually buy the options (they were 10c back when the trade was recommended, am sure they have exploded since).
    • JW
      Joel W.
      8 August 2019 @ 19:34
      RM, I have the Eurodollar futures option trade on with Interactive Brokers. I got in late, but sill up 40-some percent so far. I’ve also got a small one on with TDAmeritrade. You must apply for permission to trade futures if you haven’t done so.
    • AA
      ALBERTO A.
      8 August 2019 @ 20:30
      Hi. In any brokerage platform if you are allow to trade options and futures....dont go through a broker...nowadays you can self direct your investments. Good luck...
    • EC
      Emily C.
      8 August 2019 @ 20:49
      Charles Schwab allows you to trade options on eurodollar futures
    • J
      JP .
      8 August 2019 @ 21:46
      Interactive brokers for Euro $.. Which metal trade has been suggested? (Julian mentioned he will bring out a trade on the metals in the future).
    • RM
      R M.
      9 August 2019 @ 15:27
      Thank you to everyone for the kind replies. I will try IB next. Re TD Ameritrade (where I am in process of setting up a margin/futures account, I have heard good things about their charting platform) you can buy the Eurodollar futures but not the options on the futures, so they tell me. Their reason, as expressed to me, was that the Eurodollar call options where not liquid enough, and they wanted to protect their clients! Also interestingly, when I called Schwab, their Futures desk said they trade futures but not Eurodollar Futures, so Emily, if you hold them let me know, I definitely got bad advice. This is turning into a real learning experience for me, which is a good thing. New to futures, but not to options. To JP: If you check out the MI portfolio page you will see a trade in both Gold and GDX, and Julian's piece has recommended (and recently raised) a suggested stop on gold. Hopefully you are in the trade. It's a good one!
    • GT
      Gene T.
      9 August 2019 @ 22:41
      You can ABSOLUTELY trade Eurodollar futures (and futures options) at Charles Schwab, as I have been doing just that since last December. Most profitable trade of my life:) . They charge $1.50 in commission per contract, and fees add on another $1.27 per contract. I believe IB futures commission is a lot lower, but I've been happy w/Schwab.
    • CL
      Charl L.
      10 August 2019 @ 21:24
      Interactive Brokers. The Eurodollar is under the code GE (Not the GE : General Electric stock one)
    • RH
      Rob H.
      11 August 2019 @ 00:40
      Hi RM, I got the eurodollar option trade on with Tastyworks. You will need to permit yourself to trade futures to put the trade on. If you're not that familiar with trading futures I would also highly recommend going to TastyTrade as well for they have a lot of free content on trading futures and options. Tastyworks has really competitive commissions as well. One other cool thing they are working on now with CME is what they call the small exchange which will be a futures exchange geared for small investors with smaller contracts that are standardized.
  • BS
    Bevyn S.
    8 August 2019 @ 18:51
    Glad you covered the dollar / equity correlation... Could this be telling us something about euro bank to China funding, and dollar based Chinese reserve assets? Is there a short term funding issue in China with euros? Perhaps this has to do with European banks... Not just China...
    • BS
      Bevyn S.
      10 August 2019 @ 13:58
      For those of you still struggling to wrap your head around the risk off euro surge (and like me think this reveals important market info), check this out. https://www.zerohedge.com/news/2019-08-08/why-euro-rallying-risk
  • MW
    Marco W.
    9 August 2019 @ 03:52
    Denomination is not equal to funding source. While most of emerging market debts, high-yield securities and internet stocks are denominated in USD, ultimately they are funded by funding currencies. In Jan-Feb, Nov-Dec 2018, May-Jun 2019 and the past weeks, emerging markets weakened first, then internet stock then Dollar Index. At the same time, JPY surged, CHF rose and EUR flat or up. It is the same in 2008, the funding currencies JPY and USD skyrocketed. I guessed Macro Insiders portfolio are positioned well, i.e. long precious metals, bond and short KRW, AUD. One can always challenge himself by adding volatility, JPY, CHF long and equity short. But the greatest ideas are the simplest.
    • MW
      Marco W.
      9 August 2019 @ 07:37
      However there is one crisis scenario Dollar index can make new high - Italy.
  • BC
    Brock C.
    9 August 2019 @ 01:48
    Hello Raoul and Julian, really awesome conversation, how do you think 3 month LIBOR and eurodollar futures will be effected by the large US Treasury funding coming up?
  • AM
    Artur M.
    8 August 2019 @ 15:38
    Raoul, have you been thinking of getting on a steepner in ED market as a cheery on the bond trade? You can use Blue pack - Gold pack in eurodollars to get on 2/10 steepner as it's equivalent (correlates with) but much easier as you don't need to think about multipliers. So the most simplest would be to buy EDZ20 and sell EDZ23 if you don't want to complicate too much but the current configuration for blue pack/ gold pack is (GEU2020-GEU2023+GEZ2020-GEZ2023+GEH2021-GEH2024+GEM2021-GEM2024) (trading view formula) if you want to be strict. The shape of this configuration is at the moment the same as EDZ20 - EDZ23. I got also a suggestion from one of the Pro ED traders on twitter what he believes is the most efficient trade if you think rates going to 0 sep20 to dec20 and it is Red (EDU0/EDZ0/EDH1/EDM1) Par call strips, paying 13.5 yesterday. The 2020 Par Call strip (EDH0/EDM0/EDU0/EDZ0) was 5-6, but I can't find any definition on how par call strips actually work. Is anything you are familiar with? Thanks in advance for your thoughts and have a nice holiday guys!! Great work as these are not easy markets Artur @Ar2go2 (twitter)
    • RP
      Raoul P. | Founder
      8 August 2019 @ 17:23
      i dont really trade strips or ladders or the packs. I have traded the steepeners in ED and might do again but find the 2's 10's futures easy enough
    • AM
      Artur M.
      8 August 2019 @ 18:16
      Ok thanks, have a nice holiday
    • JQ
      JACK Q.
      9 August 2019 @ 00:28
      I have EDH1 vs EDU2 steepener on. had it on since nov last year, paid 5bp ish. it has recently come back to that level, i think its a decent place to size up again