Vol Escalation To Be Slight Amid Mid-Cycle Regime

​Realised volatility is likely to remain low but progressively start to escalate over the next two years as the market emerges out of the current mid-cycle realised volatility regime, according to Gerry Fowler, head of equity & derivatives strategy at BNP Paribas. Since mid-cycles often exhibit declining baseline volatility and increasing spike volatility as fundamental and investor leverage drivers of volatility diverge, it opens the opportunity for leverage long, risk controlled structures.