more difficult?
There are far fewer markets with sufficient liquidity for the optimum size of my trades.
How much money are you currently managing?
Over $650 million.
I assume more than half of that is due to capital appreciation.
Yes, last year's profits alone were about $300 million.
What are some markets that you really have trouble trading because of insufficient liquidity?
An example of a market I like a great deal, but in which the liquidity is often poor, is copper, hi copper, I am
now the elephant.
What kind of size can be moved comfortably in a market like copper before it becomes a problem?
I would say, in a day, you can comfortably move 500 to 800 contracts; uncomfortably, somewhat more than
that. But the daily volume of copper is currently only 7,000 to 10,000 contracts and a lot of that is local trading or
spreads. In contrast, in the T-bond market, you can move 5,000 contracts without a problem. You can also move very
large size, in the interbank currency market.
Can you trade a market like coffee, which doesn't have deep liquidity, but sometimes can develop
enormous trends?
Yes, I did trade coffee last year and made a few million dollars in it. Now, if I am managing $600 million, and
I kick in $2 million
in profits on coffee trades, it doesn't really matter that much. In fact, it could even be
counterproductive, since the time and energy I spend concentrating on coffee diminishes my focus on the currency
markets, which I trade far more heavily.
It would appear that you have reached a size level that impedes your trading performance. Since
you have substantial personal funds, did you ever consider just trading your own money and avoiding all
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