Volatility hedgers turn to gamma trades to stem slow ‘bleed’

Nearly $80 billion of gamma trades initiated in March and April as long vega strategies fare badly

volatility-charts
Strangely calm: Donald Trump's election hasn't resulted in the expected rollercoaster ride for volatility

Not so long ago, volatility traders were relishing the prospect of Donald Trump’s presidency. A volatile personality prone to explosive outbursts and erratic behaviour, he could send markets soaring or crashing with a single late-night tweet. A rollercoaster ride seemed assured. But in the six months since his inauguration, the markets have been eerily calm. The S&P 500 has inched its way to an all-time high and implied volatility – measured by the Vix – is at a historic low.

The CBOE

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