Interest in systematic flows — and specifically the effort to anticipate and quantify their impact — seems to be growing all the time.

The bull market in articles about quants and “algos” is at least half a decade old, but it waxes and wanes depending on market circumstances. Whenever there’s a bout of volatility or a drawdown, the financial media tends to ramp up the “robot” coverage, which typically manifests as “Whodunnit”-type pieces.

More recently, financial journalists have started to favor coverage of multi-strategy hedge funds. They’re the new flavor du jour, and I’m a little disappointed no one’s called them “pod people” yet. I suppose braving that joke dates me, but before any older readers draw conclusions about my age, note that 1978 actually wasn’t the last remake of Invasion of the Body Snatchers. The pod people returned in 1999 for The Faculty.

I digress. Among systematic cohorts, vol control garnered quite a bit of attention in recent days for one simple reason: Historical volatility is in the process of resetting lower, and as it does, the equity exposure purged by the vol targeting crowd earlier this month should be added back.

In a comment earlier this week, I spelled this out. A stylized accounts goes like this. Vol control strategies allocate or de-allocate based on trailing realized equity index volatility. There are different windows (i.e., lookback periods) for that. One-month, three-month, etc., and it’s a sample. You calculate it by looking at observations over whatever your trailing window is. Eventually, absent sustained large moves in stocks, historical volatility will reset lower, at which point these strategies have the green light to add back equity exposure.

On Tuesday, Nomura’s Charlie McElligott put some numbers to this discussion, which I think are helpful for anyone trying to wrap their head around precisely how it works.

“[T]he ‘shock’ days from late July and early August will start dropping out of the shorter-dated lookback windows, particularly in one-month rVol” which is set to “lose” four big-mover days over the next week, he noted. The table on the right, below, shows you those drop-outs.

So, moves of 1.6%, -1.4%, -1.8% and -3% will all fall out of the one-month sample in the days ahead. That, Charlie wrote, “will accelerate the mathematical reversion lower in realized vol,” which in turn means the mechanical bid from vol control will pick up.

What does “pick up” mean in this context? Before we can answer that it’s important to reiterate that we’re building a sample as we go, so we need stocks to stay relatively calm. Otherwise, we’re just replacing “yesterday”‘s big oscillations with tomorrow’s.

In other words: The scope of the buying (or selling in the event we do get a series of big moves) depends not only on what’s falling out of the sample, but also on how the market behaves going forward, the calmer the better. That’s where the table on the left, above, comes in.

As long as the S&P stays within a 1% daily range, vol control will be a buyer. If, for example, the S&P averages a relatively pedestrian 0.5% move looking out one week, the projected vol control bid for equities would be nearly $43 billion.

By contrast — and I point this out merely to enhance readers’ understanding of the table — in a Seventh Circle of Hell-type scenario where the S&P averages a 5% move over a multi-month period, the additional de-risking flow from vol control would be $91.2 billion. Allow me to gently suggest that if US equities become that unstable, we’ll probably have bigger worries than US equities.