COVID-19 Crash: Tail Hedge and the Convexity within IV

Put options are one of the main tools used in hedging against a black-swan event, a market crash with unpredictable cause and severe impact. The recent COVID-19 market crash where the SPY crashed 33% from 340 to 228 is an example of a black-swan event. Unpredictable with severe impact. Almost...

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Suppression of Volatility

What do you associate low volatility with? A bull market? A slow and steady upward rally? Optimistic future outlook? Do you associate it with the suppression of volatility? We know that there is a strong inverse relation between equities and volatility, a low volatility would therefore also mean that there...

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What is Volatility and Why it Matters?

Volatility is a measurement of risk in the stock market, high volatility would translate to a higher probability of the extreme events of striking it rich or going broke. Is this really true? In the next article, we will explore the mechanics which drive volatility lower and find how volatility...

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Learning about economics and investment is a joy for me.

The purpose of this blog would be to document and share my knowledge.