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VOL005: Maintaining Liquidity & Cash Efficiency ft. Zed Francis
24th November 2021 • Top Traders Unplugged • Niels Kaastrup-Larsen
00:00:00 01:09:14

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Jason Buck is joined today by Zed Francis to discuss the benefits of adding volatility strategies to your portfolio, achieving a negative a correlation to equities during market downturns, what Zed calls the ‘3 trading levers’, profiting from institutional volatility players, problems with some long-volatility strategies, when a discretionary approach is needed, how to adjust a portfolio if volatility is persisting, some thoughts on the VIX ETF, helping clients to achieve capital efficient accounts, maintaining liquidity for rebalancing during a selloff, and the deeper insight into the global macro landscape that being a volatility expert gives you.

In this episode, we discuss:

  • The benefits of volatility strategies to a portfolio
  • How to profit from large stock market selloffs
  • Some of Zed Francis’s unique approaches to volatility trading
  • Profiting from institutional volatility traders
  • When to apply a discretionary approach
  • The VIX ETF
  • Helping clients to be cash efficient in their portfolios
  • The need for liquidity during large market moves

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Episode TimeStamps:

00:00 - Intro

01:41 - Why should somebody add volatility or tail-risk strategies into their portfolio?

03:10 - Seeking a negative correlation to equities

06:16 - Can you explain what you call your ‘3 trading levers’?

08:11 - Can you breakdown your approach to combining ‘long gamma’ and ‘short Vega’?

13:40 - Do you aim to profit off institutional volatility sellers?

15:16 - Tell us about the short-vega side of your approach?

28:34 - The problems with some common long-volatility strategies?

36:24 - How do you think about the ratio between your long-gamma trades and your short-Vega trades?

38:02 - Do you want to explain your ‘Price is Right’ gameshow anology for long gamma strategies?

40:57 - Do you think that a discretionary approach is always needed at times?

50:27 - How do you adjust if volatility persists longer-term?

55:36 - What are your thoughts on the VIX?

57:50 - How to help clients to achieve capital efficient accounts?

59:37 - How do you maintain capital efficient overlays and also maintain liquidity for rebalancing during a selloff?

1:04:18 - Does being a volatility expert give you a deeper insight into the global macro landscape?