Trend Following Is Changing Faster Than Ever | Systematic Investor | Ep.409
Speakers
Summary
Niels Kaastrup-Larsen and Yoav Git explore new CME single stock futures, CFM's 'Seven Degrees of Market Structure' blog, the decline of short-term trend following, and thematic/narrative investing. The main implication is that single stock futures may now offer better risk-reward for trend followers as index volatility stays suppressed by retail options activity.
- CME will launch single stock futures on 50 top US stocks, enabling easier shorting and new diversification for trend followers.
- Kali announces forward curves for compute power, creating a new 'commodity' based on AI chip costs.
- CFM's blog highlights a surge in zero-day options selling, which creates counter-trend pressure and reduces S&P 500 index volatility.
- Idiosyncratic risk (dispersion) in single stocks is at all-time highs, while index correlation is very low.
- Short-term trend following has become more difficult due to market structure; medium/long-term equity trend remains viable.
- Themes and narratives explain an additional ~5% of equity risk, but harvesting them purely is executionally challenging.
- A diversified equity trend portfolio can combine index, sector, factor, and theme exposures, but requires careful construction.
Ideas
Prefer single stock futures over index futures.
The explosion of zero-day options selling by retail has created a strong counter-trend force in equity indices, which suppresses index volatility and increases idiosyncratic risk. As a result, single stock futures (newly launching on CME) are now more attractive for trend following than index futures because they offer higher available risk and diversification.
Up Next
This Top Traders Unplugged video, published July 19, 2026, features Yoav Git discussing CME Single Stock Futures. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: Yoav Git · Tickers: CME Single Stock Futures