Investology: Investment Management Intelligence
Investology: Investment Management Intelligence
Investment Management Intelligence
The VIX (Volatility Index): Deep Dive | Christian Kahl - Fincad
18 minutes Posted Oct 21, 2021 at 9:32 am.
Introduction to Volatility 
Volatility as an asset class 
How the VIX is constructed 
The VIX Futures 
Tradeable instruments on the VIX 
How to use the VIX and what type of investors is it for   
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This is a Deep Dive into The VIX (Volatility Index) and its futures 
TIMESTAMPS
QUOTES 
Implied volatility levels for any typical equity for low strikes is higher than for high strikes which give you an indication of the inverse correlation [between stocks and volatility]. The inverse correlation for equity is something fundamentally inherent in principles of corporate finance. 
The principle of having deeply uncorrelated assets is a fundamental proposition of modern portfolio theory.  If I pick two decorrelated assets. I build an efficient frontier. And my portfolio sharpe ratio should increase. So looking for hedges, looking for ways to diversify your portfolio is something very fundamental in the principles of portfolio investment.   
Trading volatility is far from straightforward. You might think you bought a call option that you bought yourself, some volatility exposure. But you might be left with very little volatility. And if this is really the starting point for over the counter products emerging, which give you outright exposure to the future implied volatility of the instrument. Like the VIX futures...  
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