How One Of The Most Profitable Trades Of The Last Few Years Blew Up In A Single Day
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 19 February 2018
⏱️ 31 minutes
🧾️ Download transcript
Summary
In recent years, one of the easiest ways to make money in this market has been to bet on low volatility. Up until recently, markets have been exceptionally tranquil, and trades predicated on that tranquility continuing have made a fortune. But two of the most popular vehicles for making that trade, XIV and SVXY got obliterated in one day in early February. On this week's episode of the Odd Lots podcast, we speak to Pravit Chintawongvanich, the head of Derivatives Strategy at Macro Risk Advisors about the episode. He explains what the short volatility trade was, how specifically these funds operated, and how they ultimately became victims of their own success.
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| 0:37.0 | I'm Tim O'Brien. Every week on Crash Course, I'm going to bring listeners directly into the arenas where epic upheavals occur and I'm |
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| 0:55.0 | on the I Heart Radio app, Apple Podcasts, |
| 0:57.9 | or wherever you get your podcasts. Hello, and welcome to another episode of the Odd Lots Podcast, I'm |
| 1:15.0 | J J. Jo I'm so excited. This is this is totally my topic and I'm so |
| 1:20.0 | so excited that we're gonna be discussing it for at least like 20 or 30 minutes. |
| 1:25.3 | I like how you pretend that we never talk about anything that you like. |
| 1:30.0 | You know if you wanted to you could contribute more and suggest more guess if it was if it was really that skewed towards things I liked |
| 1:37.8 | Okay, okay. I'm exaggerating a little bit but the reason I'm so excited is we're first of all going to talk about something that we have talked about on this show before in what was an excellent episode. |
| 1:50.0 | But secondly, we're going to talk about something that I've been writing about for years and actually a lot of other financial journalists and financial analysts have been writing about the same thing and then earlier this month it all happened. |
| 2:05.4 | Everything that people had been talking about, saying might happen for years, |
| 2:10.1 | actually happened and it was a huge event in the market. |
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