LONDON (Reuters) – “Chocfinger” made his name and his money by taking bold bets on cocoa markets. But after nearly four decades of trading, sometimes winning, sometimes losing, Anthony Ward threw in the towel. Ward blames the rise of computer-driven funds and high-frequency trading for forcing him and some other well-known commodities investors to close their hedge funds and look for opportunities where machines can’t make a difference. While computerized trading is not new, Ward and others argue its steady rise has reached a tipping point that is distorting prices and creating uncertainty not only for investors, but for chocolate firms, carmakers and others who rely on commodities. It was in January 2016, after a slide in cocoa prices, that Ward decided the days of traditional commodity investors doing well from taking positions based on fundamentals such as supply and demand may be numbered. “It was just too big, too quick, too dramatic. And completely against the fundamentals,” Ward told Reuters. Commodity markets fell across the board that month after weak factory data in China raised fears of lower demand from the world’s top consumer of raw materials. Ward blamed the slide in cocoa on what he regarded as misplaced… continue reading
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