October 2021 Commodity Derivatives Report

13 October 2021

In this month’s Commodity Report, Ashley Boolell, Partner at Shard Capital and Head of Commodity Derivatives covers the usual 10 commodities, which includes: oil, precious metals, forex and base metals and this time an additional commodity, natural gas.

You can download the full report on the Shard Capital website here:

Executive Summary:

Paul Tudor Jones, the American billionaire hedge fund manager, conservationist and philanthropist once said: “There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market.”

The “last third” of a trend that Jones refers to is that Mad Max moment where the decision to get in or get out of a position becomes increasingly perilous since two fears combine to mess with the trader’s head: the fear of losing money and the fear of leaving money on the table. It is in that final third that these fears become very difficult to control.

Well, let us take two examples: natural gas and palladium. The first one is facing serious supply issues while the latter is rapidly losing its status as the best-performing precious metal. To put this into perspective, going simultaneously long on the Dutch TTF Natural Gas Futures Contract and short on palladium on July 1, 2021 would have resulted in a 200% gain on September 30, 2021 assuming that the positions were closed. Not a bad return over 66 trading days.

Now the key question is: are we in the last thirds of the natural gas bull run and the palladium bear run?

Please note: This report is intended for Professional Investors only. By inputting your details, you are confirming that you are a Professional Investor.