Yeah it's tacky when the name is totally all about marketing itself. It's like pizza places that plaster on their windows "best pizza in town", you know they're FOS. Any time someone tries hard to market themselves, it gives me pause. As far as naming funds go, things like the Rentec's Medallion Fund sounds better. Nice and simple and not outrageously marketing itself in it's name with hopes and dreams and performance prowess like some others.
All those nice little premiums they picked up like nickels on the street. And then the gamma steamroller comes along and takes it all back. And then some.
Of course, the fund industry is all about minimal drawdowns, below average returns and as high fees as possible. The fact that most funds put more money into marketing than they do research, nothing else needs to be said. The fact that people still fall for that shit is ludicrous.
Wasn't this the least aggressive of their 3 strategies? What happened to the "aggressive" strategy, I wonder...
It almost makes you angry that a professional volatility fund manager with a 20 year track record would blow up on an event like that. Its gross negligence.
If you saw the prices Monday to Tuesday night you would be in shock. S&P 500 Puts that expired yesterday 1000 points away from the market where trading around 9. Options price wise, this was the worst ever event. This was THE BLACK SWAN of the black swans. Even tough market decline was not too horrible option prices were like nothing anyone saw. Not even in 2008. Another amazing/weird thing about that night was that the spead was “tight” like within 5 points. During August 2015 it was as wide as 20 points.
I've been trading vol for 17 years. It was not as bad as some other events. it was certainly inside the universe that a professional vol pm should be managing his risk towards.
I agree. The monster in the room is that these guys were trading way too big to compensate for a sub 10 VIX to offer attractive returns. Selling vol the last couple of years was lucrative but it should not have been as lucrative as some of these funds have shown. The market has been forcing vol sellers to accept lower and lower yields. This of course was not acceptable to these funds so they sized up way beyond what should have been appropriate. Nobody should have been blown out by a move up to 35 in the VIX. We use to see two to three 10% corrections a year and the avg mean level of the VIX for over a decade was close to 20! This is simply a case of juicing returns to satisfy investors.