Don’t be lulled to sleep by this market. Just because there haven’t been any real neck-snapping moves, up or down, doesn’t mean there won’t be any. Unfortunately the trade that favors a tepid market is getting more crowded by the day. What’s worse is that the investors coming in aren’t the big players, it’s mom & pop. The DailyShot details the story:
Equity Markets: Anecdotal evidence suggests that short volatility trades have made their way into the retail world. It seems that mom & pop investors are loading up on XIV – an ETN that shorts near-term VIX futures (just as bigger investors have apparently pulled out). The short vol bets have done well. The fact that it’s a derivative contract that lost over half of its value in 2015 over a couple of days doesn’t seem to bother anyone.
Read more here.
E.J. Smith - Your Survival Guy
Latest posts by E.J. Smith - Your Survival Guy (see all)
- The People’s Chemist and Your Survival Guy - May 7, 2024
- RIP Charlie Munger: Keeping It Simple Never Goes out of Style - May 7, 2024
- Investing Habits of the Fairly Wealthy: #1 Y-O-U - May 7, 2024
- “Survival Guy, It Was a Self-Preservation Move” - May 6, 2024
- The Oracle of Omaha’s Ugly Tax Prediction - May 6, 2024