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Getting To Know The Asset Class - Volatility

If you have traded options before, you would know that volatility is a crucial driver of option prices. But do you know that volatility itself can be traded like an asset? Professional investors have traded volatility for a long time because it offers some unique characteristics that are not available in other more traditional asset classes. It can potentially act as a crisis hedge against a stock market crash. This makes it a very useful complement to an investor's portfolio.

For those who are new to volatility, this introductory video will answer a few simple questions:

  1. What is volatility?

  2. What is the difference between implied and realized volatility?

  3. What are the benefits of trading volatility?

  4. What are the risks when you trade volatility?

  5. How do you trade volatility?

I hope you learn more about this interesting and useful asset class from this video!


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