It's Never Been Cheaper To Hedge Highly Speculative Tech Companies

Tyler Durden's picture

While many have noticed the demise of volatility in the US equity markets - 104 days without a 1% drop, plunge in VIX, record low monthly ranges - it is the most highly speculative and most over-valued companies that appear to be the biggest beneficiaries of peak animal spirits. It has never been cheaper to hedge stocks in the Nasdaq...

The great moderation of risk is nearing unprecedented lengths...


While expectations of short-term stock volatility is jumping...


The Nasdaq 100's 'VIX' has plunged to its lowest on record...indicating investors are anticipating milder fluctuations in the technology-focused gauge.

On a side-note, we see that HYG vol had crashed to its lowest in 3 years before surging in the last week...

Relative to S&P 500 VIX, Nasdaq 'risk' is forecast at the lowest in 4 years...


But while 'normal' risk appears to have disappeared, the 'extreme' risk of tail events is surging once again...

Which makes some sense - with Dutch, French, and German elections looming over EU existence, binary fiscal policy outcomes in the US fully priced in, and a Fed seemingly determined to hike rates no matter how weak the economic outlook becomes, any of these catalysts will lead to serious pain (that a hawkish Fed won't be able to rescue).



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Takeaction2's picture
Takeaction2 (not verified) Mar 14, 2017 5:59 PM

Let this fucker crash....The DOW goes red...and by the end of the day...all good...repeat....Oh look...Today it crashed 44 points.  Who is buying this?

CPL's picture

44 on a 20000 ticker is like pissing in the ocean.  Just look at Japan, 44 wouldn't register on anyones radar.  Eventually it won't here on the board either.

Loucleve's picture

is there a NASDAQ VIX ETF?

I dont believe so.

CPL's picture

Yes, the Russel Tech and if you want to play it I suggest Direxions x3 ETF's for quick flips.

  • Direxion Technology Bull 3x ETF TECL
  • Direxion Technology Bear 3x ETF TECS

The russell is the market under the market btw.  And the ticker for the Russell Tech index is INDEXRUSSELL: R2RGSTEC

Vlad the Inhaler's picture

Or just keep it simple and buy IWM puts.

CPL's picture

Why do IWM puts when you can build a rocket ship with an x3 ETF?  The iShares versions are x2 leverage inverse anyways at least they were couple of years ago.  Or is that the vanguard ones?

CJgipper's picture

Again.  The fed can print longer than you can stay solvent.  Short squeeze in 3.....2.....

spicedune's picture
spicedune (not verified) Mar 14, 2017 6:01 PM

the hedge hasnt been cheaper but at what cost really,

Rolln's picture

Simply AI, Everyday that goes by the smarter it gets. Probably never see a crash ever again... hahaha

hxc's picture

Black box trading is for stock hipster fucktards

I am Jobe's picture

Dump Dell, HPE,Oracle and all of them. Fuck em

buzzsaw99's picture

hedging is a waste of money. even the retards have figured that out by now.

Chippewa Partners's picture

Warren owns them.  Why hedge?  



Squid Viscous's picture

is therea triple NAz Vix long ETF, i want to triple my losses and add some decay !

absente reo's picture

Would you like options on that?

Mmm OTM options on triple NAz Vix long ETF.

Can you spell... leverage!