Top Traders Unplugged SI307: The Unpinning of Volatility & How to Prepare for What is Coming ft. Cem Karsan
Aug 3, 2024
In this engaging discussion, Cem Karsan, a volatility expert, dives into the current state of the volatility market and its implications for investors. He reveals how recent U.S. election events could reshape economic outcomes. Karsan compares volatility trading to an Olympic sport, showcasing the skill required to navigate market shifts. He emphasizes understanding flow in financial systems and preparing portfolios for volatility. The conversation also touches on factors like the dollar-yen carry trade and potential inflationary challenges, offering valuable insights for savvy investors.
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Volatility Market Dynamics
- Volatility markets exhibit reflexive behavior, creating periods of unusual calmness when volatility is well-supplied.
- This calmness can be deceptive, as the unpinning of volatility can lead to dramatic market swings, especially with the rise of zero-day-to-expiry options.
Systematic Put Buying
- Systematically buying put options can benefit from geometric returns due to their counter-correlation with market downturns.
- Consider factors like market positioning and relative value for optimal performance, or hire a professional for expertise in volatility trading.
2024 US Election Outlook
- The 2024 US election presents a complex scenario with significant implications for market dynamics.
- A potential Trump victory, coupled with a Republican Senate and existing executive powers, could lead to a volatile political and economic landscape.