Financial markets change along with the real economies on which they depend. This maxim applies to investing strategies and options markets, too. For example, the “fire and forget” approach to option selling that some traders favored in the pre-crisis world is no longer tenable (if it ever was). Risk appetites have shifted, order flow is moving into different products, and the cast of influential market agents is composed of different actors. As detailed in the attached video, here are some…
This is the third post in the series I’m writing to introduce the VIX Portfolio Hedging (VXH) Strategy. The most important feature of the VXH strategy is that it offers protection against severe market declines. Almost equally important, however, is its performance during normal market environments.
A hedging strategy that profits during a market crash is no help at all if it imposes heavy costs the rest of the time; this is one of the chief limitations of conventional…
A lot of “ancient Chinese wisdom” was being thrown about as the credit crunch mushroomed into a global economic crisis. Last month we couldn’t escape being told by ever credulous journalists that the Chinese word for “crisis” was a combination of words that meant “danger” and “opportunity”. While this, like much of the fact-challenged media’s so-called reporting, turns out to be questionable, it’s true that in crisis there is opportunity.
As we launch our calendar-spread trading newsletter and blog…
Monday, August 13, 2012
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