AD Derivs. Podcast (Ep. 76) - Simran Singh, Monaco

In this episode, Simran Singh walks listeners through his evolution from a Goldman Sachs oil trader to a crypto‑focused market maker at GSR. He recounts the unprecedented April 2020 event when WTI futures fell below zero, a scenario driven by oversupply, pandemic‑induced demand collapse, and a lack of storage capacity. The shock exposed the limits of Black‑76 pricing and prompted a rapid adoption of the Bachelier model for negative rates, offering a real‑world case study of model risk and adaptive risk management.

Transitioning to crypto, Singh highlights how volatility trading retains many traditional mechanics—delta hedging, gamma exposure, and term‑structure arbitrage—yet the participant mix is dramatically different. Retail traders dominate option flow, favoring perps and high‑frequency short‑dated contracts, while institutional players remain cautious. He explains the vol‑carry trade, buying front‑month options and selling longer‑dated strikes to capture the compression of the volatility curve, a tactic that mirrors commodity markets but requires careful gamma management in the fast‑moving DeFi environment.

The conversation closes with a deep dive into precious‑metal volatility. Singh links the recent spikes in gold and silver implied volatility to a broader debasement narrative, noting that paper markets vastly outweigh physical delivery capacity, which introduces counter‑party risk. He cautions that while the allure of outsized returns persists, traders must weigh the speculative surge against underlying supply constraints and the still‑evolving institutional appetite for crypto as a store of value. This perspective underscores the importance of disciplined risk frameworks across both traditional and digital asset classes.