One of the attractions of volatility trading is that the hedge fund manager can profit on a given index whether it goes up or down by using options, writes Stuart Fieldhouse of the Options Industry Council.

Attention Required! | Cloudflare

Volatility as an Asset Class Volatility trading possesses a number of attractive qualities for both the fund manager and his ultimate investor. As an asset class, the cost of volatility increases when uncertainty increases, but also has a tendency to revert to a mean. It can be traded in a number of ways, including purely speculatively, or arbitraged e. But at the core of a successful volatility-based strategy lies the effective use of options.

As a hedge fund strategy, volatility trading has evolved significantly since the financial crisis, when many volatility specialist funds posted headline numbers. Since then investors have begun to see the volatility fund as more than just a hedge against volatile markets, but also as an investment in its own right. This has occurred as skilled fund managers have begun to demonstrate that they can go both long and short volatility.

The VIX index—the CBOE Chicago Board Options Exchange volatility index VIX VXX —has established itself as one of the key volatility benchmarks in the market and offers some excellent options trading opportunities, allowing the fund manager to go long or short vega the option's level of sensitivity to changes in the volatility of an underlying asset. While the VIX contract is the volatility option flagship, other volatility indexes are gaining in popularity, including the CBOE Emerging Market ETF Volatility Index VXEEM and CBOE Gold Volatility Index GVZ.

Implied volatility is part and parcel of the way options are priced. Joe Burgoyne explores the topic of rolling options positions with Steve Claussen from OptionsHouse.

Then he connects wit….

Hedge Fund Loans % Commercial Loans

Sponsored Content—There is a tendency to see investment tools in isolation. Energy prices have been on a wild ride in the past year, pulled between efforts by OPEC to cut production and by the re…. Attend and receive expert stock, fund and ETF picks from world renowned financial gurus. Related Articles on OPTIONS. OICs Wide World of Options Then he connects wit… Joe Burgoyne.

How Can an Option Help My Stock Position? The MoneyShow San Francisco San Francisco Marriott Marquis August 24, Events Conferences Cruises Virtual Events Event FAQs Cruise FAQs Premier Memberships Forbes Cruise Advertise.

About Us MoneyShow Team Testimonials FAQs Advertise Press Center Contact Us.