Volatility for Dummies
|
By Jared Dillian
I am a big fan of the “For Dummies” books.
I’m a pretty dang good DJ, and 12 years ago, I taught myself to DJ by reading DJing For Dummies. When I started my podcast, I got Podcasting For Dummies. Went through a juicing phase and got Juices and Smoothies For Dummies.
I have a bunch of other ones, too, including Personal Finance For Dummies, which is written by a guy who has “MBA” after his name.
That’s why I’ve been contracted to write the new Volatility For Dummies:
Just kidding, I am doing no such thing.
Equity volatility has turned into a big asset class. When I started trading 20 years ago, it was just puts and calls and dynamic hedging. Now we have VIX futures and options, variance swaps, exotic options, plus a bunch of other crazy stuff.
The equity vol community is large enough that it actually has its own subculture on Twitter. There are some pretty colorful characters.
As you have probably noticed, stocks are a wee bit more volatile these days. We’ve approached levels of volatility similar to what we experienced during the financial crisis, and before that, the Great Depression. It’s pretty intense.
I can tell you one thing: If you can handle this, you can handle anything. I would characterize any move over 2% in the stock market as large. 10% is, well, the largest since the crash of 1987.
Keep reading at Mauldin Economics…
Comments
By Jared Dillian
I am a big fan of the “For Dummies” books.
I’m a pretty dang good DJ, and 12 years ago, I taught myself to DJ by reading DJing For Dummies. When I started my podcast, I got Podcasting For Dummies. Went through a juicing phase and got Juices and Smoothies For Dummies.
I have a bunch of other ones, too, including Personal Finance For Dummies, which is written by a guy who has “MBA” after his name.
That’s why I’ve been contracted to write the new Volatility For Dummies:
Just kidding, I am doing no such thing.
Equity volatility has turned into a big asset class. When I started trading 20 years ago, it was just puts and calls and dynamic hedging. Now we have VIX futures and options, variance swaps, exotic options, plus a bunch of other crazy stuff.
The equity vol community is large enough that it actually has its own subculture on Twitter. There are some pretty colorful characters.
As you have probably noticed, stocks are a wee bit more volatile these days. We’ve approached levels of volatility similar to what we experienced during the financial crisis, and before that, the Great Depression. It’s pretty intense.
I can tell you one thing: If you can handle this, you can handle anything. I would characterize any move over 2% in the stock market as large. 10% is, well, the largest since the crash of 1987.
Keep reading at Mauldin Economics…