VOL06: Finding True Value in the World of Volatility ft. Benn Eifert
Top Traders Unplugged
The Importance of Relative Value Trading
RV strategy involves spreading certain options against other options. Some spreads are relatively safe in some ways and cross-asset spreads get even more dicey. Is it an issue just to size the riskier stuff down or is it something where you can control by delta hedging actively or trading around the position yep um very good question.
On today’s episode, Hari Krishnan is joined today by Benn Eifert, to discuss running a volatility fund, the benefits that Benn gets from using Twitter, how to effectively serve clients as a volatility trader, the drawbacks of hedging via ETFs, monitoring market flows, the popularity of short-dated options, implied volatility versus realised volatility, how correlations change over time, balancing family-life with managing a fund, and the new normalisation of working from home.
-----
50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
In this episode, we discuss:
- A behind the scenes look at running a volatility fund
- How to use Twitter as an investor
- Bringing value to clients as a volatility trader
- Hedging via ETFs
- Market flows
- Options
- Implied volatility
- Finding a good work & life balance
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.
Learn more about the Trend Barometer here.
Send your questions to info@toptradersunplugged.com
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.
Follow Hari on Twitter.
Follow Benn on Twitter.
-----
Episode TimeStamps:
00:00 - Intro
02:20 - How did you end up running a Volatility fund?
06:39 - Why did you join a Vol fund instead of a Global Macro fund?
09:30 - What do you gain from being on Twitter?
11:50 - Explain some of the methods behind how you serve your clients
16:19 - What are some of the weaknesses of hedging via ETF products?
19:44 - Do you find a lot of value in monitoring the flows into various markets?
23:34 - Why is it people are so eager to sell shorter-dated options?
26:17 - How do you counter the argument that it’s a good idea to write calls against short positions?
30:05 - What are some of the issues with looking at implied volatility versus realised volatility?
33:13 - What challenges do you face as a Volatility pro, when it comes to the extreme moves up and down?
37:37 - What do you do when you expect large volatility but the direction is unknown?
40:30 - How would you react if you knew that there was a huge amount of open interest, 5% down in the S&P, with a few weeks to go?
42:52 - Do you have any thoughts on the recent dislocation between the VIX and the S&P 500?
46:04 - What are the changes in dispersion dynamics and implied correlations that you’ve noticed over the years?
55:03 - Is it fair to say that if you’re long enough Volatility, and there’s a large enough systemic shock, then you’re going to make money?
56:48 - Do you have anything to say about the 10-year note futures options surface? Are there persistent distortions there?
59:25 - If you see a distortion in the skew, how do you approach it?
01:02:56 - Balancing family life and managing a fund
01:05:12 - The recent legitimisation of working from home
Copyright © 2024 – CMC AG – All Rights Reserved
----
PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:
1. eBooks that cover key topics that you need to know about
In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here
2. Daily Trend Barometer and Market Score
One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here
3. Other Resources that can help you
And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here
The AI-powered Podcast Player
