Indian Institute of Quantitative Finance
Indian Institute of Quantitative Finance
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Volatility Trading Advisory Service

MoreInformation Volatility as an Asset Class

Most people trading in the derivatives market are very wary of volatility, as it is that demon which most often wrecks the maximum havoc to their portfolio and causes maximum losses to them. The reason that people are scared of volatility is that is quite a difficult quantity to grasp conceptually and most people find it even more difficult to predict its movements.

For most market participants including many option traders, especially in India, volatility is quite a nebulous concept and its actual dynamics are very little understood by them. We find the situation quite alarming that even amongst those option traders who profess to be "volatility traders", the concept is very little understood in its actuality. Though they swear by volatility trading, yet we find that they have very scant understanding of what volatility trading actually is!

Though it is true that this creature called volatility is not something easy to tame, little do they know that this extremely wild thing can be mastered and once tamed this can be utilized in one's favour to make great profits at low risk.

In fact, volatility can be treated as an "Asset Class" in itself just like other real asset classes like stocks, bonds, currencies, etc. and can be traded as an asset like the others - volatility can be "bought" and "sold".

MoreInformation Trading Volatility

Volatility can be traded both directly as well as indirectly. There are derivatives like "variance swaps", "volatility swaps", etc. that let you trade volatility directly. However, volatility can also be packaged through a combination of other strategies and traded. Most common strategies being straddle and strangle, which though are not "pure" volatility strategies in the sense that they cannot isolate volatility entirely.

We implement proprietary strategies like the caterpillar, iron caterpillar, broken calendar spreads, etc. that isolates volatility to great degree of purity.

Coming from Risk Management Research background, as we do, predicting volatility comes naturally to us. These strategies are deployed using our proprietary volatility forecast models that makes extremely accurate forecast of volatilities.

MoreInformationVolatility Trading Advisory Service
We provide volatility trading strategy advisory service to derivatives trading desks of financial institutions. Our proprietary strategies are being used to generate low risk profits and have been successfully delivering high returns on a very consistent basis.

Nitish Mukherjee : +91-22-28797660 / +91-9769860151

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