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Short-Volatility Bets Boom as Hedge Funds Take Banks' Baton

  • Fast money bets on muted price swings in debt, mutual funds
  • Option sales profitable as private-bank clients go long
Updated on

The short-vol trade is dead. Long live the short-vol trade.

Investors are discovering fresh ways to bet volatility across asset classes will tumble anew even as hawkish monetary policy, emerging-market turmoil and February’s vol-mageddon underscore headwinds to the complex trade.