SI409: Why Trend Following Is Changing Faster Than Ever ft. Yoav Git

**Niels Kaastrup-Larsen** (0:01)
Welcome to Top Traders Unplugged. In markets, success doesn't come from predicting what happens next. It comes from being prepared for what you can't predict.
In each episode, we go deep with some of the world's most thoughtful minds in investing, economics, and beyond to understand how they think, how they prepare, and how they decide, and the experiences that shaped how they see the world. No noise, no shortcuts, just real conversations to help you think better and invest with confidence.

**Niels Kaastrup-Larsen** (0:35)
Welcome or welcome back to this week's edition of the systematic investor series where Yoav Git and I, Niels Kaastrup-Larsen, where each week we take the pulse of the global market through the lens of a rules-based investor. Yoav, it is wonderful to have you back this week. I hope you're doing well despite the challenging result in the football last night.

**Yoav Git** (0:56)
I've got to say, as an English supporter, we're kind of used to that behaviour. It's very much trend following.

**Niels Kaastrup-Larsen** (1:02)
Yeah, that is true. Unfortunately, it is one of those trends you don't really want to follow in all sense.

**Yoav Git** (1:07)
No, absolutely. You become very emotionally involved and invested throughout the tournament, only for counter trend to disappoint you right at the end.

**Niels Kaastrup-Larsen** (1:17)
Yeah, well, at least we now have a final with a European team and a South American team, so we get a little bit of diversification in terms of style, perhaps.

**Yoav Git** (1:25)
Diversification is very important.

**Niels Kaastrup-Larsen** (1:27)
Good stuff. All right. We've got a pretty full plate today.
Great line of topics. Thank you so much for bringing them along today. We'll be diving into all of that in a few minutes, but as usual, I'm always curious to find out what's been on your radar the last few weeks or few days for that matter.

**Yoav Git** (1:47)
Thank you. So the thing that has been on my radar are actually new products coming to market. So we've seen the CME has announced that they are going to launch 50 odd leading US stocks as a single stock futures on the CME, which I think is really, really exciting. And at the same time, Cal-She is announcing forward curves for compute power for the cost of compute power. So that's like a different type of commodity, which we've never seen before, which is like using various chips of NVIDIA. And that's really exciting to me. But I think it brings together one aspect that people kind of, normally as a mathematician, you kind of ignore it. But when you're a practitioner, one of the things that is really important is actually thinking about the tax implications or various practical implications of trading it. So I've spent the last week figuring out what would be the tax implication for trading single stock futures. Because the treatment of the dividend, the treatment of the price rise, that's actually quite important. It's very clear for index futures, everybody knows what it is.
For single stocks, less so.
And for Cal-She, it's even more complicated. So the tax status, whatever it is, it's still unclear. And I think if we want to see growth and innovation, you know, it's the practical things which often are stopping you from getting involved in the market, which is where you kind of want to.

**Niels Kaastrup-Larsen** (3:25)
Yeah. I mean, single stock futures, there is definitely a little bit of a debate among CTA practitioners for sure. And I don't know that that many of our colleagues have embraced them. I do know that some have embraced them and feel very strongly about the advantage of trading single stock futures rather than just trading the indices.
But at least it gives more choice, I guess. But I will be interested in seeing what the adoption rate, at least among what I consider kind of the CTA world, I'm sure it'll be adopted by the wider hedge fund audience. But yeah, very exciting. And there seems to be a lot of innovation going on in terms of futures and markets, almost to a point where you think, well, do we really need another one of these? But maybe we do.

**Yoav Git** (4:20)
It's not necessarily just for CTAs, but just the ability to short a stock, right? It's not something that it's very easy for, it's very easy for a retail investor, right? But if you have a future contract, then it suddenly becomes possible because you don't have to worry about shorting and borrowing and that aspect of it. So I think actually I'm kind of, I think that will be a very attractive, even not for CTAs, but I think it will be attractive to CTAs as well, but also for the audience in general, the ability to short specific stocks will be useful.