Economics
One-Way Vol Bets Seen as ‘Fool’s Errand’ by 6,000% Winner
- Volmageddon blew up short vol strategy, stock calm sinks longs
- Goldman bets on aimlessness, neither high- nor low-vol regime
This article is for subscribers only.
Heads you lose, tails you lose. This year for the first time, trading strategies betting on a jump in equity market volatility and those wagering for calm are both losing.
The reason? February’s “volmageddon” blow out, which did enough to sink short-volatility strategies but not enough to protect long-vol trades from the tranquility that’s enveloped stocks on their way to new peaks.