Skip to main content

The 'Hyper-Crash' Is Coming - It's Not The Everything Bubble, It's The Global Short Volatility Bubble - Zerohedge

The Global Short Volatility trade now represents an estimated $2+ trillion in financial engineering strategies that simultaneously exert influence over, and are influenced by, stock market volatility. We broadly define the short volatility trade as any financial strategy that relies on the assumption of market stability to generate returns, while using volatility itself as an input for risk taking. Many popular institutional investment strategies, even if they are not explicitly shorting derivatives, generate excess returns from the same implicit risk factors as a portfolio of short optionality, and contain hidden fragility.
Source: The 'Hyper-Crash' Is Coming - It's Not The Everything Bubble, It's The Global Short Volatility Bubble

Comments

Post a Comment

Popular posts from this blog

Fed, ECB, BoJ, PBOC Balance Sheet + Global Systemically Important Banks + Emerging Markets - Zerohedge

Source: "Get Prepared" For The Chaos To Come, Snyder Fears Global Financial Bear Market Looms - ZeroHedge
Post a Comment
Read more

Best of the week - FT

  Bondi attacks show old hatreds are flourishing again — Stephen Bush The worried investor’s guide to 2026 — Katie Martin We urgently need to rebalance EU-China relations — Emmanuel Macron The argument Iranians have in private — Najmeh Bozorgmehr The hard politics of climate overshoot — Pilita Clark
Post a Comment
Read more