Monetary Matters with Jack Farley When the Market Crashes… They Profit | Wayne Himelsein on Logica Capital’s Long Volatility Playbook
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Apr 9, 2025 Wayne Himelsein, CIO and founder of Logica Capital Advisors, dives into the fascinating world of long volatility strategies. He explains how his hedge fund thrives during volatility spikes, offering innovative solutions to traditional hedging problems. The discussion covers the evolution of long volatility strategies and the importance of early success in financial ventures. Himelsein also emphasizes proactive risk management and liquidity strategies essential for navigating turbulent markets, highlighting Logica's plans for blending new insights into their future fund launches.
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Counterintuitive Hedging
- Shorting volatility to gain long exposure is counterintuitive.
- It's like "wearing a weight belt to do the high jump."
Belly and Tail Spread Risks
- During a moderate correction, shorting the belly and longing the tail can hurt.
- The short position suffers before the long tail pays off.
Volatility Drag Management
- Managing volatility drag incorrectly can be worse than ignoring it.
- Poor implementation of long volatility strategies can sour investors on the entire concept.