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The Long And Short Of Volatility Strategies

Trading volatility has been a popular strategy employed by hedge funds since the financial crisis in 2008 when a number of long volatility funds posted big returns.  The high levels of volatility during the financial crisis a decade ago – on November 20th 2008, the VIX closed at 80.86 - highlighted how effectively these strategies can be used to produce alpha. Volatility strategies have subsequently evolved over the last decade with a number of volatility specific strategies now being measured in indexes; it is now considered not just a hedge against volatile markets, but an established asset class in its own...