Popular Low-Volatility Game Returning 4,000% May End in Tears
- Short interest in key volatility index has gone exponential
- Flattening call skews on U.S. equities are at multi-year lows
This article is for subscribers only.
The most profitable short trade in town has been a gift that keeps giving. To be precise, it’s had an eye-popping surge of more than 4,000 percent since the start of the bull run in 2009. That allure has been enticing investors to jump on the gravy train.
That gift -- selling volatility -- is so crowded now that when everyone reaches for the exit, it’s bound not to end well.