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When the Market Crashes… They Profit | Wayne Himelsein on Logica Capital’s Long Volatility Playbook
Apr 9, 2025
Wayne Himelsein, CIO and founder of Logica Capital Advisors, discusses innovative strategies for profiting during market volatility. He shares how his hedge fund navigates the challenges of maintaining long volatility exposure without draining resources through ineffective hedges. The conversation covers the evolution of volatility trading since 2015 and emphasizes the need for a deep understanding of market dynamics. Himelsein also highlights the importance of adaptability and continuous research in developing successful trading strategies.
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Quick takeaways
- Long volatility strategies are essential for managing risk during market downturns, aligning investor goals without counterproductive complications from shorting volatility.
- Market conditions significantly influence volatility strategy performance, especially during stress events, highlighting the need for clarity in understanding these dynamics.
Deep dives
The Case for Long Volatility Strategies
Long volatility strategies are highlighted as essential for managing risk during market downturns. Unlike common practices where investors short volatility to finance long positions, which introduces counterproductive risks, a pure long volatility approach maintains alignment with the investor's original goal of capitalizing on market sell-offs. An analogy is drawn, suggesting that attempting to short volatility while wanting to be long is akin to wearing a weight belt while trying to high jump; it complicates the objective. This straightforward philosophy underscores the importance of clarity in strategy design for managing volatility.
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