VOL05: Maintaining Liquidity & Cash Efficiency ft. Zed Francis
Top Traders Unplugged
Fixed Strike Volatility
Vixenex gives us maybe a proxy for to day's volatility. But it's not telling you, what is the price you paid for something? And has vall moved in any sort of direction from that implied volatility? Is there another way or a better aknowlog you have for fixd trike vallor i mean, that's a bit of why i said the vixs 70 % iractional, 29 % the gama space, and only one % volatility.
Jason Buck is joined today by Zed Francis to discuss the benefits of adding volatility strategies to your portfolio, achieving a negative a correlation to equities during market downturns, what Zed calls the ‘3 trading levers’, profiting from institutional volatility players, problems with some long-volatility strategies, when a discretionary approach is needed, how to adjust a portfolio if volatility is persisting, some thoughts on the VIX ETF, helping clients to achieve capital efficient accounts, maintaining liquidity for rebalancing during a selloff, and the deeper insight into the global macro landscape that being a volatility expert gives you.
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In this episode, we discuss:
- The benefits of volatility strategies to a portfolio
- How to profit from large stock market selloffs
- Some of Zed Francis’s unique approaches to volatility trading
- Profiting from institutional volatility traders
- When to apply a discretionary approach
- The VIX ETF
- Helping clients to be cash efficient in their portfolios
- The need for liquidity during large market moves
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Episode TimeStamps:
00:00 - Intro
01:41 - Why should somebody add volatility or tail-risk strategies into their portfolio?
03:10 - Seeking a negative correlation to equities
06:16 - Can you explain what you call your ‘3 trading levers’?
08:11 - Can you breakdown your approach to combining ‘long gamma’ and ‘short Vega’?
13:40 - Do you aim to profit off institutional volatility sellers?
15:16 - Tell us about the short-vega side of your approach?
28:34 - The problems with some common long-volatility strategies?
36:24 - How do you think about the ratio between your long-gamma trades and your short-Vega trades?
38:02 - Do you want to explain your ‘Price is Right’ gameshow anology for long gamma strategies?
40:57 - Do you think that a discretionary approach is always needed at times?
50:27 - How do you adjust if volatility persists longer-term?
55:36 - What are your thoughts on the VIX?
57:50 - How to help clients to achieve capital efficient accounts?
59:37 - How do you maintain capital efficient overlays and also maintain liquidity for rebalancing during a selloff?
1:04:18 - Does being a volatility expert give you a deeper insight into the global macro landscape?
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