SI389: The Market Is Pinned, But Risk Is Growing ft. Cem Karsan & Alan Dunne
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 712 Ratings
🗓️ 28 February 2026
⏱️ 63 minutes
🧾️ Download transcript
Summary
In this episode, Alan Dunne and Cem Karsan explore a market that appears calm on the surface yet increasingly unstable underneath. As indices move sideways, they discuss how options flows and structured products are reshaping market behavior, driving rotation rather than direction. From the weakening of former leaders to the rise of defensives, the conversation turns to what these shifts may signal about a broader topping process. They also examine the growing influence of AI narratives, political incentives, and global tensions, not as isolated shocks but as forces building pressure within the system. The result is a discussion about how markets evolve when structure, policy, and sentiment begin to move out of sync.
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Episode TimeStamps:
00:00 Intro to the Systematic Investor Series
00:23 Performance check: CTAs strong, trend tailwinds
03:13 Range-bound indices, but big dispersion and rotation
03:45 Why options pin the index: dealer flows and vol compression
05:42 Dispersion mechanics: idiosyncratic risk, falling correlation
07:32 Rotation as a topping process: leaders fade, defensives rise
09:54 OPEX and quarterly expiries: why timing windows matter
11:56 The March support effect, then weaker flows into April
17:02 AI narrative shock: anxiety, backlash, and policy consequences
22:32 Populism versus deflation stories: why inflation returns
32:43 Gold outlook: secular bull, but expect two-sided volatility
45:45 Rates as “tectonic plates”: vol compressed now, release later
50:23 Midterms, incentives, and the fight for control
57:42 Liquidity loop: markets stop rising, collateral stops expanding
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Transcript
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| 0:00.0 | You're about to join Neil's Kostrup Larson on a raw and honest journey into the world of systematic investing |
| 0:07.2 | and learn about the most dependable and consistent yet often overlooked investment strategy. |
| 0:13.2 | Welcome to the Systematic Investor Series. |
| 0:26.5 | Welcome back to the latest edition of Top Traders Unplugged, |
| 0:30.8 | where each week we take the pulse of the markets from the perspective of a rules-based investor. |
| 0:36.5 | It's Alan Dunn sitting in again this week for Neals, who's still in sunny Miami. |
| 0:40.7 | And I'm home already, but here in the hot seat talking to Jim today. Jam how are you doing great here in Chicago in the hot seat believe it or not |
| 0:46.4 | 61 degrees in sunny in Chicago in February nice so no no major suns or snowstorms disrupting things in Chicago. No, we were able to |
| 0:57.2 | sidestep it. We never, we never get the sidestep. We always get the front kind of snow at the face, |
| 1:03.7 | but no, this time somehow we sidestepped it. Very good. Well, plenty to talk about. We've no |
| 1:08.6 | shortage of macro themes and topics and interesting |
| 1:14.0 | developments in markets. Obviously, equities continue to gyrate, the rotation trade, etc. |
| 1:20.3 | And markets under a little bit of pressure today already. But maybe just, I mean, to talk about performance, because always helpful just |
| 1:31.0 | get the performance in context, we've had a very strong run for managed futures in the last |
| 1:36.3 | six months or so, continuing this month. So on the month, now, Sochgen CCH index is up 2.96% and Sochgen trend indexed up 3.38%. |
| 1:48.0 | And year today, the Sochgen CTE index is up 7.8%. And the trend index is up 8.25%. And for the short-term |
| 1:56.7 | traders also doing well, 0.8% on the month and 3.15% on the year. So certainly positive sentiment |
| 2:04.5 | around that. And I think, you know, coming from I connections this week, that was certainly |
| 2:09.2 | felt in terms of positivity around hedge funds in general, but CCHAs also certainly participate in |
| 2:17.4 | that positive narrative. |
| 2:19.3 | Obviously, a lot going on markets-wise, |
| 2:21.7 | but like in terms of hedge fund performance and CTA performance, |
... |
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