Sometimes no trade is the trade', Vulcan Metals takes the long view

When James Gallo started in markets, commodities were still traded in the pit. After a short stint as an intern he was hooked. Gallo eventually became the youngest COMEX trader ever at age 21. Since then, he's built an expertise in copper and metals trading that he now uses to run his own fund

"As a floor trader you learn certain things about how the commodities market works," he tells Opalesque New Managers. "When the market changed and went to all electronic trading, a lot of guys didn't handle it that well. I've been fortunate in that when I wanted to start my own fund I was able to join up with a couple other metals brokers and we're using our knowledge of floor trading and electronic trading to build the Vulcan Metals strategy."

Vulcan Metals is a discretionary metals strategy that trades both base and precious metals. The fund uses a mix of arbitrage and flow trading and has a target size of about $300-400 million

Gallo first developed views on market structure by trading his own money. He owns and operates All American Copper corp a copper brokerage and trading firm, that launched in 1994. "I've been in this business most of my life and there is just a level of knowledge that you pick up over the years," he says

Edward Smith and Anthony Cicileo, who make up the rest of the management team have similar stories and backgrounds in gold and silver. By relying on their institutional knowledge of commodities markets, the Vulcan team makes relative value trades in a variety of metals including copper, gold, silver, platinum and palladium. The fund's strict risk management rules keep position sizes and concentrations in check

"We think it's really important to focus on position s......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.