Skip to main content

Arion Investment Management: Exploiting Arbitrage Opportunities In Metals

Since the financial crisis the commodities trading landscape has changed significantly, to a large extent because of regulation (Dodd and Frank, we know who you are) and to a lesser extent because sharp price drops in oil and metals left institutional investors weary of commodities. Algorithmic trading has to great extent squeezed out short-term commodity traders while trade finance-type deals have been taken over by large trading houses such as Glencore and Trafigura. Because of Dodd-Frank large banks have closed down proprietary desks, reducing the depth of the commodities futures and options market and leaving more scope for price distortions. While this...