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Alternative Market Briefing

Commodity arbitrage as a sustainable trade

Tuesday, March 03, 2020

amb
Anant Jatia
B. G., Opalesque Geneva:

Arbitrage opportunities within the commodity space are enduring, according to Anant Jati, founder of Greenland Investment Management. Greenland is a technology-driven systematic investment manager that runs two funds, one that does FX and commodity arbitrage, and one that does commodity arbitrage only.

Arbitrage opportunities within the commodity space will always exist due to permanent inefficiencies, Jatia says in a recent Opalesque TV interview. "We think of these arbitrage opportunities as persistent arbitrage opportunities, because they're driven by genuine demand supply imbalances of a commodity across two different geographies," he explains. "Demand supply shocks or demand-supply imbalances will always persist through time as the market can't perfectly predict the forwarding demand or supply. As such, these arbs will always persist. Even if you look at very easy to access arbs, like copper, for example, that still exists today, with good opportunities to make money."

He does not see the large commodity house such as Glencore and Trafigura as competition but as necessary actors in the market place. Indeed, commodity trading firms are all essentially in ......................

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