Volatility Trading: The Market Tactic That’s Driving Stocks Haywire | WSJ

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  • Опубліковано 16 вер 2024

КОМЕНТАРІ • 179

  • @MADMAX7330
    @MADMAX7330 4 роки тому +173

    "Experts agree that the more volatile a market, the riskier"- Awwe jee, thanks Experts!

    • @iAmTheSquidThing
      @iAmTheSquidThing 3 роки тому +5

      Not all experts agree on that. And I'm no expert, but I'm not convinced. For instance, an index fund can be volatile, but is almost certain to grow over the course of a few decades. Whereas a supposedly stable blue-chip company could have a massive scandal or failure and collapse, like in 2008.

    • @xf0rc365
      @xf0rc365 3 роки тому

      @@iAmTheSquidThing 2008 was the fault of an entire market's practice, not the effect of some blue-chip company. Also, when the S&P climbs higher and higher every year, periods of volatility (corrections), are natural events that "ground" the market, if you will. Those periods are entirely unpredictable, and in a volatile market where no analysis will point you towards a clear direction, of course, it will be riskier to trade.

    • @KlausM
      @KlausM 2 роки тому +1

      Not necessarily true. If shorting volatility such as using SVXY or XIV (that went bust), then the calm market is the more risky, because these product will drop like a stone if VIX increases more than 100% a day (as in Feb 2018). The likelihood of VIX increasing from 10 to 20 overnight is much higher than VIX increasing from e.g. 60 to 120 overnight. Therefore one cannot generalize like this in relation to trading volatility.
      But one thing is sure: Going long volatility, such as buying UVXY, when the VIX index is already very high, is the stupidest thing ever.

    • @oraimo3728
      @oraimo3728 3 місяці тому +1

      😂😂😂😂😂

  • @filippofanin7664
    @filippofanin7664 4 роки тому +49

    "A more volatile market is also a riskier one" : groundbreaking takeway, well done wsj

  • @winstonjones7912
    @winstonjones7912 4 роки тому +104

    Please stay out of UVXY if you are not an experienced investor. I learned the hard way recently.

    • @francescomarialeo
      @francescomarialeo 4 роки тому +4

      Sorry man 😅 a few months ago, it was betweet 8-12$ and stable before the crisis, had to buy it before, during it's suecide.

    • @Shvabicu
      @Shvabicu 4 роки тому +2

      It's not an investment instrument. That's your mistake. It's purely for trading.

    • @francescomarialeo
      @francescomarialeo 4 роки тому +2

      @@Shvabicu Sure but a crisis had been anticipated and you could have bought UVXY a few months before the crash, during the slowdown that everyone knew was leading to a crisis, Coronavirus was the spark that lit it up.

    • @PritamDas_26
      @PritamDas_26 4 роки тому +5

      Experienced investors can suck my pee pee. I've made $7000 from $300 since Covid began

    • @winstonjones7912
      @winstonjones7912 4 роки тому +15

      @@PritamDas_26 I can clearly see that you are a new trader. be careful and good luck.

  • @Showmetheevidence-
    @Showmetheevidence- 4 роки тому +154

    Volatility trading hasn’t attracted “investors”... it’s attracted gamblers.

    • @ThoseWhoHeedTheCall
      @ThoseWhoHeedTheCall 4 роки тому +15

      Modern investing = gambling.

    • @donovan_lf
      @donovan_lf 4 роки тому +6

      This has some truth to it. I bought calls on VXX on the 9th that would expire in a month, predicting liquidity would decrease in the short term and leveraged etfs would compound selling. It was kinda true but it was still a major gamble that I rationalized to make myself feel better.

    • @HanZhang1994
      @HanZhang1994 4 роки тому

      potato, tomato.

    • @miguelo.
      @miguelo. 4 роки тому +3

      Investing is a relative timeframe unique to each persons timeline view of an actionable event.
      You aren’t bidding the Austrian 100 year bond are you?
      Well by that investor´s opinion, your T-bill portfolio of 2s,10s,20s is a scalp trade...its all relative.
      And if you dont understand relativity and multi fractal, multi-duration investing...then yes, your generalized view is as good as CNBC expert views :)

    • @Gindaman999
      @Gindaman999 4 роки тому +1

      Yeah, but it is also great for hedging. It will be no brainer if the stonks only go up, you need some intruments to protect from stocks falling

  • @XtarShoter
    @XtarShoter 4 роки тому +81

    Volatility isn't an investment

    • @cryptonative
      @cryptonative 4 роки тому +4

      It’s 100% an investment. It makes money for investors.

    • @victorespino5650
      @victorespino5650 4 роки тому +24

      It's speculation

    • @victorespino5650
      @victorespino5650 4 роки тому +22

      @@cryptonative it's not investing it's gambling. Sophisticated gambling lol

    • @cryptonative
      @cryptonative 4 роки тому +1

      Victor Espino No. Sometimes is investing, sometimes is gambling. You can made quantitative estimations on S&P500 returns. So can you on its volatility. Also, there a 100+ years of data.

    • @victorespino5650
      @victorespino5650 4 роки тому +2

      @@cryptonative it's mostly used to hedge your investment. Or make income while holding your investment. It's a derivative

  • @LeonardEisen
    @LeonardEisen 4 роки тому +46

    I'm just here so I can understand why the next recession is gonna happen.

    • @FrizzelFry
      @FrizzelFry 4 роки тому +4

      hehe just that. Some people spend their full career trying to figure that out. But start by learning about the business cycle ua-cam.com/video/PHe0bXAIuk0/v-deo.html

    • @campkira
      @campkira 4 роки тому

      good thing is this made market over inflation but it don't matter much since all of them a sold stock a used stock and got sold away...... not current owner stock.... which do give estmate of vaule of company... yeah.. company vaule are all estimate... but they still had to made real money...

  • @dhobbyd
    @dhobbyd 4 роки тому +15

    FYI, UVXY is not designed for long term holding (i.e. for hedging purposes) as the value will depreciate due to contango

  • @datguyoverdere6616
    @datguyoverdere6616 3 роки тому +6

    I love watching people finish their ramble with a grin, lookin proud they got it right! Hard to take seriously though unfortunately.

  • @henryli693
    @henryli693 4 роки тому +17

    Pure gamble.

  • @83Mike17
    @83Mike17 4 роки тому +18

    The Wall Street Casino

  • @davidliang913
    @davidliang913 4 роки тому +74

    Everyone wants to make a quick buck!

    • @deleteduser8949
      @deleteduser8949 4 роки тому +3

      You don’t?

    • @ammarqureshi2347
      @ammarqureshi2347 4 роки тому +2

      Trading on speculation like lets people lose alot more than they gain.

    • @87channels
      @87channels 4 роки тому +2

      @@deleteduser8949 theres a difference between wanting to make a quick buck and successfully making a quick buck

    • @deleteduser8949
      @deleteduser8949 4 роки тому +3

      @@87channels Agreed. But the main comment says want.

  • @AmanC000
    @AmanC000 4 роки тому +22

    Good piece but not the correct explaination, basically VIX is not directly investable but there are ETFs linked to VIX index which has a convexity in returns that means downside is limited if you buy it in a stable market when VIX is between 14 to 20 but upside is unlimited with high probability of large gains which creates asymmetrical returns. These investments are mean reverting that means you cant buy and hold in the long run, you sell it as soon as you reach your return target. The huge risk comes in when you have direct exposure through short positions which can create huge losses. Hope this helps

    • @DannyLandPK
      @DannyLandPK 4 роки тому

      Thanks alot! Where did you learn this? Do you have any resources you recommend?

    • @AmanC000
      @AmanC000 4 роки тому +1

      @@DannyLandPK
      Hi Danny thanks for your comment, I learnt through my education, designations and practical experience over the years coz I am very passionate about finance and investments but I can definitely share some resources if you would like

    • @DannyLandPK
      @DannyLandPK 4 роки тому +1

      @@AmanC000 yes I also took some financial economics classes in university, but I would love to know more! Please do share any resources you recommend. Thanks again

    • @AmanC000
      @AmanC000 4 роки тому +1

      @@DannyLandPK yes sounds good will share some material

    • @arjunrk4573
      @arjunrk4573 4 роки тому +2

      @@AmanC000 Hey Aman, can you share the links to the material here please? Thanks

  • @seniorjulio
    @seniorjulio 4 роки тому +20

    remember folks, the derivatives market is a zero-sum game, someone HAS to lose.

    • @dds3524
      @dds3524 4 роки тому +2

      This used to be the case.. until central banks started intervening

    • @alenpaul2523
      @alenpaul2523 4 роки тому

      @@dds3524 😑

    • @vonbayernDE
      @vonbayernDE 4 роки тому

      @@dds3524 The someone is the central bank which in effect is the ppl.

    • @Gindaman999
      @Gindaman999 4 роки тому +2

      All financial trading is a zero sum, you can only buy if there's one person to sell it to you, and one of you will be wrong the next second. Even for long-term ,if the value of some financial asset goes up (etc, stocks), it is relative to other financial assets, so people who long these assets relative to stocks lost.

    • @vonbayernDE
      @vonbayernDE 4 роки тому +1

      @@Gindaman999 I think it is also possible that there are profit for everyone provided the company keep growing. So there is value surplus. The party that get the the loss is the nature. In term of investment, all investor got profit, but if whole ecosystem is considered, than it is different.

  • @numanh8391
    @numanh8391 4 роки тому +27

    Volatility trading basically means
    Take the money and RUN 🏃‍♂️

  • @nathangrosh3882
    @nathangrosh3882 4 роки тому +7

    Question for Folks: I feel like this video failed to tie volatility trading to the negative effects on the overall health of the stock market. Am I missing something? At most it seems like this video made an argument that novice investors are losing money because the market is volatile, but then you might as well get mad at oil futures if that's the stance.

    • @silasalberti3524
      @silasalberti3524 4 роки тому +2

      Agree

    • @TactileTrade
      @TactileTrade 3 роки тому

      I agree, I don't see how trading activity on volatility products would influence stock prices. Buying and selling of UVXY, VXX, etc directly doesn't change their prices since their prices are determined only by changes in the VIX futures.

  • @K-FOREST_Original
    @K-FOREST_Original 4 роки тому +2

    As the world is, this fluidity and variability is also a process and repetition. Some are opportunities, others are crises.

  • @carstars
    @carstars 4 роки тому +2

    Thanks to these people to trade volatility and provide liquidity for those who need it. For me, I get excited about buying brokered CDs when they panicked sold in March/April. Sit enjoying government-guaranteed 1.3% for next 12 to 36 months until this crazy ends.

  • @Hollyweed1
    @Hollyweed1 4 роки тому +2

    Learn the difference between TRADING and INVESTING

  • @countcampula
    @countcampula 2 місяці тому +1

    Options is for hedging, not betting.

  • @dennis_johnson
    @dennis_johnson 4 роки тому +5

    Where do you draw the line on such derivatives?

  • @TheTekkitSource1
    @TheTekkitSource1 4 роки тому +8

    remember kids, there are two rules in finance:
    1. stocks only go up
    2. short the VIX

    • @markderlo212
      @markderlo212 3 роки тому +1

      obviously you don’t know what vix trading is, making profit on it is not directly inverse-related to the market as such ! therefore you better sit quiet.

    • @shaunsensei6948
      @shaunsensei6948 11 місяців тому

      You give off WSB smell. No trend remains similar is the only thing you should print in your mind before getting into the markets. Sure index has gone up but one day there very much can be a case like Japan where it does not happen. This is certainly true if your are trading/investing individual stocks. So kids on;ly remember these things - 1) No trend remains same forever 2) Risk management is the key to success in the markets.

  • @dodid0
    @dodid0 4 роки тому +11

    In summation: When you bet on things and see you portfolio go up, you believe your IQ is rising with it. Soon however, you will make loses you can't recuperate from. It turns out it was a gamble, and you were not the next Gordon Gekko.
    Stick to value investing.

    • @imaref9551
      @imaref9551 4 роки тому

      Well for me personally I use derivatives trading for short term gains and transfer that to long term investing which I use value investing

  • @stevenwashington917
    @stevenwashington917 4 роки тому +2

    Awesome video bro! Making money in cards couldn't be easier in basketball. Buy a few hall of fame caliber players with multiple rings like Kawhi, Lebron, Curry, Kobe etc. Next, just let time pass and see a steady growth over the years. It's important to buy the right stuff though, chrome stock refractors (Prizm, Select, Optic).
    By the way, if the Raptors win this year, Patrick McCaw will be the youngest player ever with 4 rings, the only active player with 4 rings. He will have more than Curry, Lebron, Durant etc. He has only been in the league 4 years and will have won 4 rings straight.
    Guess who just spent a few hundred on Patrick McCaw on Comc? ;)

  • @EonLimey
    @EonLimey 4 роки тому +7

    Why does an innocent explanation of a derivative have a title that looks so vilifying?

  • @jacobdavid
    @jacobdavid 2 роки тому +1

    Greed can be one's undoing. That's the takeaway! Good video!

  • @gneyman
    @gneyman 4 роки тому

    No.
    Vol arb : IV vs IV
    Gamma scalping: Rv vs IV

  • @itsallagame2013
    @itsallagame2013 4 роки тому +4

    Been shorting since February, so far so good! A few downs tho. Or rather say a few ups LOL!

    • @ChrisMarx
      @ChrisMarx 4 роки тому

      So short the spikes? Seems like a more consistent strategy.

  • @melaniehutcheson3695
    @melaniehutcheson3695 2 роки тому

    Best looking Journalist on the PLANET!! 🤣

  • @frenchmarty7446
    @frenchmarty7446 2 роки тому

    That title is such a spurious assertion.
    We are coming out of a ten-year stable bull run. Volatility and risk moves in cycles. You can't infer causal relations from unrepresentative data.

  • @barondelabirra921
    @barondelabirra921 4 роки тому +1

    Could be necessary a little faith to see real correlation in the charts comparison? (In 02:50)

  • @syaluuuuu2
    @syaluuuuu2 5 місяців тому

    wow cool thanks for sharing

  • @iAmTheSquidThing
    @iAmTheSquidThing 3 роки тому +1

    The VIX looks pretty volatile itself. I'm going to make an exchange-traded product which is tied to metavolatility.

  • @mrpmj00
    @mrpmj00 4 роки тому +2

    Volatility is NOT risk. Risk is when a company might not be in business 5 or 10 years from now like Tesla.

    • @zoe7526
      @zoe7526 4 роки тому +2

      The EU moving to ban selling gas cars sounds like Tesla is in a good place

  • @djlz8850
    @djlz8850 4 роки тому +1

    Volatility is movement

  • @bustatrades
    @bustatrades Рік тому

    We love the VOL

  • @nobo1682
    @nobo1682 4 роки тому +3

    That's ethically questionable, and a necessary evil with the current system in place, it's how we transition into a debt base society.

  • @FinancialShinanigan
    @FinancialShinanigan 4 роки тому +10

    If you think of investing as marriage, people wouldn't be trading in and out like they are now.

  • @djlz8850
    @djlz8850 4 роки тому +1

    you need some movement to create a market -

  • @andarubimasakti1332
    @andarubimasakti1332 4 роки тому +1

    This type of trading in which most people don't understand what they are doing is what causes most US crisis and make countries with heavy trading with the USA suffers from time to time.

  • @denisbaranov1367
    @denisbaranov1367 4 роки тому

    ControlTheNarrative has joined the conversation

  • @288theabe
    @288theabe 4 роки тому +1

    So the New York stock exchange became the new Vegas. Got it

  • @htconexify
    @htconexify 4 роки тому +1

    Well if people make money went stocks go down, it means more people have money when stocks go up.

  • @ClaxtonBay123
    @ClaxtonBay123 4 роки тому +1

    Is this Joanna Stern's voice? She's carrying WSJ on her back right now.

  • @Mamelcrispen
    @Mamelcrispen 3 роки тому +1

    154

  • @mirzabaig4711
    @mirzabaig4711 3 роки тому +1

    The Wall Street Journal: "Making people worry about things they shouldn't worry about."

  • @edricwijaya6933
    @edricwijaya6933 4 роки тому +1

    Isn't those bankers sound so greedy to make money, but thanks to them we can get stock at better price

  • @javiermendoza5173
    @javiermendoza5173 4 роки тому

    Wsb brought me here, hold for the lambos guys

  • @Spurros
    @Spurros 4 роки тому +1

    Betting on a bet. Sounds like a synthetic CDO to me...

  • @macrossactual
    @macrossactual 4 роки тому

    clear as mud.

  • @Adam-pv4qn
    @Adam-pv4qn 4 роки тому

    That's cool.

  • @MrPrush-ji4gs
    @MrPrush-ji4gs 3 роки тому

    S&p futures 2016 to today? $75,000 per contract in profit... sheesh!

  • @johnvictorroderos8842
    @johnvictorroderos8842 4 роки тому +1

    This is trading not investing

  • @esquire9445
    @esquire9445 4 роки тому

    Nice to see young reporters that don’t have a clue what they are talking about act like experts

  • @karishmamalhotra6437
    @karishmamalhotra6437 4 роки тому

    nice

  • @dddhhh2612
    @dddhhh2612 4 роки тому +1

    ugh . . . difference between investing and gambling. Pretty twisted reasoning . . .

  • @hardlyb
    @hardlyb 4 роки тому +1

    My strategy is to stockpile canned dogfood and hope for the best.

  • @sleekoduck
    @sleekoduck 4 роки тому +3

    This reminds me of the junk bonds in the 1980s and the high risk mortgage funds earlier this century.

    • @TactileTrade
      @TactileTrade 3 роки тому

      Fortunately this time around, all the risks are outlined in the prospectuses for VXX, UVXY, etc. Unfortunately, few people bother to read them before jumping in.

  • @CannabisTechLife
    @CannabisTechLife 4 роки тому +1

    1:03 is she in a cloud?

  • @patrickvaldivia2467
    @patrickvaldivia2467 4 роки тому

    who told her about wallstreetbets?

  • @auro1986
    @auro1986 4 роки тому

    how do they steal stocks?

  • @razzlfraz
    @razzlfraz 4 роки тому

    Typical news. Something is happening so lets blame it on the market behavior. The fact is, the last 10 years has had some of the lowest volatility in the US' history, possibly the lowest volatility. Volatility has been going down due to HFT bots eating it up. This was predicted. What was also predicted back in 2018, is that vol can not get much lower, and like any cyclic measurement, it's going to have to expand, and with luck volatility will remain high this decade. (Though, unlike the professional who think this, I don't think the high volatility will last.) There is no proof showing the vix is increasing market volatility.
    For anyone who is a bit more professional, volatility trading is used almost exclusively to hedge bets.

    • @TactileTrade
      @TactileTrade 3 роки тому

      Volatility as an asset class is also realistic - with a well designed strategy and understanding of how vol products work!

  • @NYC1
    @NYC1 4 роки тому

    Just waiting for the bigger and bigger time bomb to explode

  • @sravanvlogs1377
    @sravanvlogs1377 4 роки тому +2

    When private equity hedge funds gets more influence in financial markets that stock market gets more volatility

  • @Jobba62184
    @Jobba62184 4 роки тому

    The dealer will eventually deal himself a blackjack and wipe everyone out at the table. Take your chips and go have a drink by the bar for now. The shoe (2020) will not be favorable for most. Same concept with the markets.

  • @longsilver2646
    @longsilver2646 4 роки тому +5

    The huge bubble will pop soon.

    • @francescomarialeo
      @francescomarialeo 4 роки тому

      And it starts today 😅📉, for the us it's bad, Eurostocks are not doing that bad 👌

  • @quackcement
    @quackcement 4 роки тому

    You may get lucky with one volatile stock. But keep betting and youll loose your gains

  • @nanaprt61
    @nanaprt61 4 роки тому +2

    I’m a volatility trader and I haven’t lost any money this year.

    • @ce7545
      @ce7545 4 роки тому

      Wait a few months

    • @michelbruns
      @michelbruns 4 роки тому

      @@ce7545 heard that literally 2-3months ago and made great returns

    • @gus473
      @gus473 4 роки тому

      😅😍🤣
      Sure, yeah, of course....!

    • @nanaprt61
      @nanaprt61 4 роки тому

      Mike Gustafson shut up dude

    • @victorespino5650
      @victorespino5650 4 роки тому

      Everyone else on the other side of your bet lost

  • @yenzyhebron5278
    @yenzyhebron5278 4 роки тому +2

    The only thing I get from these is that human greed really took off this year

  • @jorishnathanael1812
    @jorishnathanael1812 4 роки тому

    Hello forex

  • @eugeniorenaldo
    @eugeniorenaldo 4 роки тому +1

    Strange how Daddy's girls are always happy when they know they're being watched even when talking about something so dramatic for regular folks.

  • @commonsense31
    @commonsense31 4 роки тому +1

    So these financial institutes need to be regulating as a gambling company and gambling services

  • @humbertoantonio2914
    @humbertoantonio2914 3 роки тому

    The mysterious scorpio parallely borrow because ferryboat importantly mess up qua a strong booklet. separate, abrasive authorisation

  • @BB.54
    @BB.54 4 місяці тому

    Bs lol

  • @FrizzelFry
    @FrizzelFry 4 роки тому +2

    We need to cancel volatility

  • @JS-cc5hw
    @JS-cc5hw 4 роки тому +1

    First

    • @ApplianceGuy
      @ApplianceGuy 4 роки тому

      ua-cam.com/video/BLUkgRAy_Vo/v-deo.html

    • @JS-cc5hw
      @JS-cc5hw 4 роки тому +3

      D Jack says the guy who cared enough to edit their comment to link to a meme

  • @HypeJoeyYT
    @HypeJoeyYT 4 роки тому

    No likes. No dislikes. And I will be the first to like