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Raoul Pal Warns The Day Of Reckoning Looms For VIX Shorts
Zerohedge ^
| 1/21/2017
| Tyler Durden
Posted on 01/22/2017 6:33:51 AM PST by John123
He compares the VIX contango trade to the portfolio insurance problem that was blamed for the 1987 crash... they don't realize the rate of change of the VIX can be so extraordinary that the losses can mount up massively and super quickly...
(Excerpt) Read more at zerohedge.com ...
TOPICS: Business/Economy
KEYWORDS: vix
I don't know the guy but am aware of the issue... this is not the "mom and pop" kind investing topic but is a very, very dangerous speculative trade that is hugely popular. Shorting the VIX means the bet is the stock market will continue to go up... and make a little bit of money because of the contango effect. However, the VIX can rise dramatically... very quickly if the stock market corrects, which can lead to huge trading losses/margin calls/bankruptcy.
1
posted on
01/22/2017 6:33:51 AM PST
by
John123
To: John123
Does the name Tom Kivisto ring any bells ?
2
posted on
01/22/2017 6:58:52 AM PST
by
Eric in the Ozarks
(Baseball players, gangsters and musicians are remembered. But journalists are forgotten.)
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