Panic Overdone? | VIX 3rd Highest Spike Ever | How the Strategies Held Up | Short Volatility Trades

Derek Moore and Jay Pestrichelli jumped on a special edition podcast to discuss whether the move in things like the VIX and VIX were warranted given the technical surroundings of the carry trade and where markets went. Looking back at previous VIX spikes and the high yield spread in times of crisis. Plus, discussing how some strategies held up and some insights into what went on. Finally, what a higher volatility regime would mean for strategies that sell options like covered calls or high probability credit spreads.

 

VIX 3^rd highest spike in history going back to 1992

VVIX 4^th highest spike ever

Comparing the VIX Index spike to the High Yield Spread

There was no VIX Index back in 1987 but estimates say it would have been highest ever

Are there currently structural problems showing in the US Economy?

Unemployment rate up due to increase in population and size of labor force

Explaining the VVIX Index

Warren Buffet comment about whether you should be invested in stocks

People don’t make good investment decisions when they panic

Market performance historically after major VIX spikes

Comparing the carry trade blowup to August 2015 drop due to the Chinese Yuan move

 

 

Mentioned in this Episode

 

Podcast Market Volatility | Yen Carry Trade Unwind Explained | High Yield Holds Up | Dissecting the Unemployment Rate Rise Causes

https://open.spotify.com/episode/4aBJMdpmanE3Anncxlzfqs?si=zflHqMZuS7OZ5cAL0ae0Sg

 

Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT

 

Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt

 

Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

 

Contact Derek [e-mail]

 

www.zegafinancial.com