Map to the Underworld: $2 Trillion of Volatility Trades Here
- Products tied to market swings put in spotlight amid selloff
- Inverse VIX ETPs grew in popularity with short-vol trade
This article is for subscribers only.
For a fledgling asset class whose idiosyncrasies are understood by few, there sure is a lot of money swirling around in volatility trades.
Investment strategies and products married to market swings were thrust front and center by the worst market meltdown in seven years, in which the Cboe Volatility Index surged to its highest level since 2015. VIX-related securities were halted, volatility-targeting quants blamed, and options trading in benchmarks for turbulence ballooned.