Beast Drag Civic EG6 vs Rare JDM E-AT

zerohedge.com / by Tyler Durden / Apr 7, 2017

Over the past several months, one of the proposals floated on this website to explain the strange collapse in volatility at a time when uncertainty has soared, was the so-called “negative convexity” gamma trade, demonstrated best by the Catalyst Funds’ Hedged Futures Strategy Fund in mid-February, according to which traders buying vol has led to dealers offsetting these purchases with more than proportional purchases of offsetting underlying assets as a hedge, in the process pushing sending realized – and thus implied – volatility even lower.

Today, the WSJ picks up on this idea, and looks at a possible “feedback loop” scenario in which selling of volatility leads to even more selling of volatility, resulting in a market in which the VIX appears oddly disconnected from prevailing nervous sentiment. According to the WSJ’s Jon Sindreau, the theory, advanced by several money managers, bankers and analysts, “describes a type of feedback loop in which calm markets make selling insurance against sharp swings in asset prices profitable, which makes the markets more calm, which then makes selling insurance yet more attractive. And on and on.”

READ MORE

The post Why Traders Are Now Selling Insurance To Protect Against Volatility: A “Feedback Loop” Theory appeared first on Silver For The People.

bitcoin News Poll Suggests Young Romanians Want to Pay with Crypto More than half of Romanians living in cities know about cryptos, and 60 percent of people under 40 believe they are the future of […]

What do you think? Is it too late? 1.0m Subscribers 5.7k Online A community dedicated to bitcoin [BTC], the currency of the Internet. bitcoin [BTC] is a distributed, worldwide, decentralized digital money. bitcoin [BTC]s are […]