Top Traders Unplugged · Nov 7, 2026 · 1h 4m · 54m saved
With Cem Karsan, Founder of Kai Volatility Advisors
US public and private equity is now worth about $300 trillion, so a 20% fall pulls roughly $50 trillion of liquidity out of the system. Cem Karsan, founder of Kai Volatility Advisors, told Top Traders Unplugged that this makes markets too big to fail, and that Washington will need a crisis before it can launch the response he summarizes as "print money, buy stocks." Most investors still treat passive index investing as the safe default, and Cem thinks it is the next thing to break.
"Before June of '27, we believe there'll be a meaningful crisis that will be allowed essentially to happen... to respond with what is needed in terms of a massive response to a building set of pressures that are unsustainable otherwise." — Cem Karsan
Cem runs a volatility fund, and six months before the vote he flagged the midterms as the point where the system would turn. He recorded this two days after the election, with the VIX up roughly 25% on the day.
The full interview is covered here so you can skip it. 64 minutes of audio, 10 minutes of reading.
Here are the 12 calls that matter.
Key Takeaways
Two good days in volatility can offset six months of losses, which is why vol managers had a strong week
Treasury Secretary Scott Bessent's silence before the midterms is, for Cem, the start of a new round of market intervention
A $300 trillion equity market means a 20% fall drains $50 trillion of liquidity, so markets are now too big to fail
The US is fighting an economic war over the dollar, and its presence in Iran is about protecting it
The plan is "print money, buy stocks," a state industrial policy modeled loosely on Japan, where the central bank owns 8% of the Nikkei
Passive investing will not survive the coming crisis, Cem argues, and he offers 4 building blocks to replace it
Cem expects a meaningful crisis before June 2027
1. Vol Recovers Fast
Niels Kaastrup-Larsen, who hosts Top Traders Unplugged, opened with the early-November numbers. Trend followers had a rough start to the month on reversals in oil, a flight to safety in bonds, and headwinds in grains and currencies.
BTOP50: down 1.59% in November, up 11.62% for the year
SocGen CTA index: down 1.81%, up 11.81% for the year
SocGen Trend: down 1.75%, up 12.39% for the year
MSCI World: up 1.23% for the month, up 12.25% for the year
S&P 500 total return: up 1.44%, up 13.37% for the year
World Government Bonds: up 39bps in November, down about 1% for the year
Volatility strategies had a weak year as prices for options protection fell. Dispersion trading, which bets that individual stocks move more than the index, did very well until it got so expensive that many managers stopped. Cem tied that to the stress in multi-strategy and long-short equity funds in September and October, as liquidity was squeezed at the index level.
Cem Karsan says vol strategies win big and fast when they win
"Two days in vol space can make up for six months of bad performance... so unlike some of these other strategies, when it's good it's great and when it's not, it's kind of meh." — Cem Karsan
The two trading days before the recording were "very flows based," and both were strong for volatility managers.
