​Short Vol Strategies Fight Back After August Shock

Short volatility strategies and exchange-traded products have been tested over the last few months as U.S. equity volatility has continued to show its “schizophrenic disposition” since the August spike and leading up to every subsequent Federal Reserve meeting. Proponents of short vol strategies and funds insist they should be taken as complementary to other long vol funds and other hedging, while others say some of the short vol strategies available are too risky and could even be contributing to a distortion of the wider volatility market. Daniel O’Leary reports.