1 hr 26 min
Protecting the Portfolio not with Long Vol, but with Long Gamma, with Convexitas The Derivative
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- Investing
When in Rome do as the Romans do?...Did they have convexity? They had the word, convexitas, and in this episode, we are joined by not one, but TWO brainiacs in the option and vol space, Devin Anderson and Zed Francis from Convexitas. Devin and Zed making noise in the derivative world by launching the first true discretionary, all separate account implemented, derivative manager into existence.
Tune in as Devin and Zed talk us through constructing Convexitas, their long gamma tail liquidity strategy, why short deltas can often be better than long vega (volatility), including why and how logistics, design and structural impacts – including tax consideration – matter when choosing protection for your stock-heavy portfolio. We go on to ask where we are on the institutional vol selling popularity curve, and what’s wrong with some of the popular portfolio protection strategies such as the behemoth hedge equity program. We close out this episode with their hottest takes, where you'll want to listen to see who thinks The Beatles are overrated and who is a semi-pro shooter.
Chapters:
00:00-00:55= Intro
00:56-24:25= The first, true discretionary, all separate account implemented, derivative manager in existence
24:26-56:57= Tail Liquidity and “they can’t participate in that long gamma”
56:58-01:08:22= What’s smart money using to hedge? Is dumb money back on short vol side?
01:08:23-01:18:32= Tell us what’s wrong with the friendly neighborhood hedged equity program?
01:18:33-01:26:29= Hottest Take
Highlights from this week's episode include:
Learn how Convexitas designed its tail liquidity to reinvest capital during drawdown events and be the excess return driver
Vol expansion and what happens when people are overpaying and all utilizing the same instruments to protect
The different dynamics of hedgers reacting to where the market goes and how Convexitas responds
What derivative managers get wrong when it comes to tax, why they shouldn’t bring institutional thinking into the family office and retail world, and how to understand the benefits of derivative investing, plus more!
Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-up for our blog digest.
Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer
When in Rome do as the Romans do?...Did they have convexity? They had the word, convexitas, and in this episode, we are joined by not one, but TWO brainiacs in the option and vol space, Devin Anderson and Zed Francis from Convexitas. Devin and Zed making noise in the derivative world by launching the first true discretionary, all separate account implemented, derivative manager into existence.
Tune in as Devin and Zed talk us through constructing Convexitas, their long gamma tail liquidity strategy, why short deltas can often be better than long vega (volatility), including why and how logistics, design and structural impacts – including tax consideration – matter when choosing protection for your stock-heavy portfolio. We go on to ask where we are on the institutional vol selling popularity curve, and what’s wrong with some of the popular portfolio protection strategies such as the behemoth hedge equity program. We close out this episode with their hottest takes, where you'll want to listen to see who thinks The Beatles are overrated and who is a semi-pro shooter.
Chapters:
00:00-00:55= Intro
00:56-24:25= The first, true discretionary, all separate account implemented, derivative manager in existence
24:26-56:57= Tail Liquidity and “they can’t participate in that long gamma”
56:58-01:08:22= What’s smart money using to hedge? Is dumb money back on short vol side?
01:08:23-01:18:32= Tell us what’s wrong with the friendly neighborhood hedged equity program?
01:18:33-01:26:29= Hottest Take
Highlights from this week's episode include:
Learn how Convexitas designed its tail liquidity to reinvest capital during drawdown events and be the excess return driver
Vol expansion and what happens when people are overpaying and all utilizing the same instruments to protect
The different dynamics of hedgers reacting to where the market goes and how Convexitas responds
What derivative managers get wrong when it comes to tax, why they shouldn’t bring institutional thinking into the family office and retail world, and how to understand the benefits of derivative investing, plus more!
Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-up for our blog digest.
Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer
1 hr 26 min