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LSUtoOmaha
LSU Fan
Nashville
Member since Apr 2004
24368 posts

re: Florida Man Who Raised $100 Million To Short The VIX Likely Returning To Old Job At Target
But it actually works.


BearsFan
Baylor Fan
Member since Mar 2016
490 posts

re: Florida Man Who Raised $100 Million To Short The VIX Likely Returning To Old Job At Target
Could someone explain this to me (a person who has no financial background)?

Like what was he actually doing?
This post was edited on 2/7 at 6:38 pm


LSUtoOmaha
LSU Fan
Nashville
Member since Apr 2004
24368 posts

re: Florida Man Who Raised $100 Million To Short The VIX Likely Returning To Old Job At Target
In the financial markets there is something called volatility. Volatility is by definition the number of standard deviations from a mean. Basically it is tracking how much the stock market is moving around. Generally the stock market volatility in the past few years has been really low. We have not had many days for example where the market went down more than a percentage or two. So people basically bet for the near future that the volatility will remain low, and they roll those winnings over. Well eventually, like on Monday, the market goes into a relative tailspin and the rate of volatility doubled, and boom just like that, the entire fund betting against volatility is wiped out. The reason they are screwed is because they are compounding winnings and betting into how volatile markets WILL be. That is why I stated earlier than I am annoyed. It took reckless behavior to get wiped out.
This post was edited on 2/7 at 8:20 pm


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southernelite
McNeese State Fan
Dallas
Member since Sep 2009
49752 posts

re: Florida Man Who Raised $100 Million To Short The VIX Likely Returning To Old Job At Target
He basically bet 4 million there wouldn’t be an earthquake. An then a 7 on the Richter scale rocked his world.


BearsFan
Baylor Fan
Member since Mar 2016
490 posts

re: Florida Man Who Raised $100 Million To Short The VIX Likely Returning To Old Job At Target
Thanks for explaining that. Did he bet everything he had?


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