volatility

Deutsche Bank Presents: An Updated Guide To The Low Vol Regime

"If there was sufficient loss of political support in the US for many of Trump’s policies such that the chance of successful execution falls towards zero, then central banks may need to return to the forefront of the deflation battle. Central Bank support for the economy was starting to lose credibility amongst some investors last year."

There's no better way to introduce Deutsche Bank's latest on the low vol regime than to quote a piece we penned a couple of weeks ago. And even if there was a better way to introduce it, there's nothing like a little self-aggrandizing to boost one's ego and quoting oneself is a great way to self-aggrandize. So with that in mind, here's what we said previously about the market's obsession with explaining suppressed vol.: Volatility has become the market’s perpetual topic du jour (does it make sense to use “perpetual” and “du jour” in the same sentence? Not sure on that). Suppressed vol has become ubiquitous. And the amusing thing about ubiquity is that it has a way of making everyone think they’re entitled to have an opinion on whatever it is that’s ubiquitous. That’s certainly the case with volatility – these days, everyone who’s bought themselves some VXX or XIV lately thinks they’re Rocky Fishman. That’s the (black) magic of VIX ETPs. Hordes of retail investors have been transformed virtually overnight into futures traders much the same way as the rampant proliferation of margin debt in early 2015 helped turn every bored housewife in China into a
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1 comment on “Deutsche Bank Presents: An Updated Guide To The Low Vol Regime

  1. Jeff says:

    “low vol regimes lasting for many more months/TEARS,”

    A typo that speaks to my breaking (short) heart…

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