The Perils of Shorting Volatility

The perception of a limitless “Fed put” has encouraged investors to become dangerously overconfident by shorting volatility. But there are risks by doing this. When the short volatility trade unwinds due to a catalyst that’s not easily identifiable in advance, there could be a major reversal of the S&P 500 and in public perception that central bankers are all-powerful superheroes.

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Jim Rickards’ Project Prophesy

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Dan Amoss

Dan Amoss, CFA, tracks aggressive accounting and other red flags that markets miss. He’s a student of the Austrian School of economics and Daily Reckoning fan since 2000. Agora Financial relies on Dan for macro market commentary as well as profitable plays like his 2008 call to readers to buy Lehman Bros. puts, which...

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