‘The Risk Remains Large’: Updating The VIX ETP ‘Doom Loop’

Ok, I think this is as good a time as any to update you on where this market stands in terms of what we've variously dubbed the "nightmare loop" or, if you like, the "doom loop." Generally speaking, what we're talking about when we talk about "feedback loops" in this context is the potential for a VIX spike to trigger a panicked rebalance by inverse and levered VIX ETPs that would in turn exacerbate said spike and eventually force vol. control funds and CTAs to deleverage into a falling market.