Alpha Exchange

Benjamin Bowler, Managing Director and Global Head of Equity Derivatives Research at Bank of America

27 snips
May 20, 2025
Ben Bowler, Global Head of Equity Derivatives Research at Bank of America Merrill Lynch, dives deep into market volatility and fragility. He compares recent S&P volatility events to past crises like the GFC and Covid, highlighting today's added complexities. Ben discusses the surge in fragility among U.S. single stocks, emphasizing electronic liquidity withdrawal during stress. He also examines historical innovation's role in creating asset price bubbles and the need for a long-term investor perspective amidst these dynamics.
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INSIGHT

Historic April Volatility Shock

  • April's market volatility was historic, comparable to the GFC and COVID crashes.
  • Outsiders experienced this shock more severely due to simultaneous declines in US dollar, treasuries, and equities.
INSIGHT

Global Stress Index Predicts Market Lows

  • BoA's Global Financial Stress Indicator flags cross-asset risk momentum effectively.
  • Its critical stress signal has accurately anticipated market lows and policy interventions since 2013.
INSIGHT

Fragility and Liquidity Failures Explained

  • Market fragility has increased due to crowding and liquidity withdrawal during stress.
  • Last August's VIX spike was mainly a liquidity failure unlike recent positioning-driven shocks.
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