Next up in our series of notes from the Alpha Hedge West Conference is the Role of Volatility with a panel featuring Michael Schmanske of Glenshaw Capital, Christopher Cole of Artemis Capital, Zem Sternberg of Lake Hill Capital, and Joe Reynoso of Reynoso Asset Management.
The Role of Volatility
JC> Volatility is the new asset class.
JR> Used to be that the dumbest guy bought options, now that's not the case. Options now efficient for hedging.
ZS> Think of not as an asset class, but as a specialization.
JC> Government is the elephant in the room.
CF> Volatility has normalized. QE has impacted pricing of tail risk. Some think Fed can suppress volatility, thinks that is a myth.
JR> Seems like volatility is moving similar among asset classes. Fed won't let market crash.
CC> Financial repression.
ZS> Brokers & Liquidity providers make money in options, those are the proven models. Don't ignore the info the options market give, even if you don't trade it.
CC> Key is valuing the expectation of volatility. Game theory is key. Life is decay. The more people short VOL, the more risk for a spike.
ZS> Think of options as insurance. Move from Newtonian world to quantum mechanics.
Be sure to check out the rest of our summary of the Alpha Hedge West Conference.
