Better System Trader

237: New Volatility Based Trading Techniques with Rob Hanna

25 snips
May 30, 2024
Rob Hanna, expert in volatility-based trading strategies, challenges conventional wisdom on using the VIX for market timing. He discusses using SPX signals, indicators for short-term market moves, practical strategies for trading VIX instruments, and a simple VIX model using SPX movements. Listeners can learn about leveraging quicker VIX recovery to reduce drawdowns and new techniques for volatility-based trading.
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ANECDOTE

Rob Hanna’s Trading Background

  • Rob Hanna began trading in the mid-90s and started a small fund in 2001 before joining a registered advisor in 2019.
  • He still runs Quantifiable Edges and shares research while managing money at Capital Advisors 360.
INSIGHT

VIX Became Tradable Then Used As Indicator

  • VIX became tradable only after futures and ETNs arrived, changing how traders can act on volatility signals.
  • Rob Hanna questions whether VIX should time SPX or vice versa and studies which signals lead.
INSIGHT

What The VIX Actually Measures

  • The VIX measures implied 30-day volatility derived from S&P 500 options, not realized volatility.
  • It rises when traders buy protection during sell-offs, earning the nickname "fear index."
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