So I have been short the S&P for a while betting on the fact that volatility will shoot up massively and increase the values of highly leveraged puts. ...This is indeed what has happened... VIX, the volatility index has jumped to levels unheard of ( at 63 as compared to sub 10 in 2007 and levels of mid 20s most times) and I made a big return. However, my HUMAN CAPITAL is tied to the market and I am REALLY worried about a recession now... 7% index drops in U.S. markets on successive days are jumps no one had really modeled before.
This is the environment when GAMMA pays even though it is expensive i.e. better to be LONG options than short....
volatility, jump risk, inflation and fear premia are back
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I was skeptical of your very first prediction of down going to 10k within 3 months. You were right on. Great job dude.
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