I’m a buy and hold investor myself, but I like to have a tactical overlay, this might be the most interesting stuff you could have learned from the last week: SVXY is my new tool going forward.
Here, two success stories of hedge funds who got it right this time and how they did it. You don’t need a lot of cash-out to buy yourself into this trade. There are tradable options on the SVXY! Let’s assume you have a $1mio portfolio producing 4% dividends a year, if you tactically reallocate a tiny part of these holdings into the right structures, you can have a much smoother ride.
For traders at a little-known Denver hedge fund who saw it coming, it was the score of a lifetime – a $17.5 million payday on a $200,000 bet. “People were laughing at us, saying this could never happen, this should never happen,” Justin Borus, the 41-year-old founder and manager at Denver-based Ibex Investors, said in an interview. “We saw people pricing this as a 1-in-5,000 event.”
Cole’s Artemis Vega fund, which he started with $1m and has now attracted nearly $350m of investors’ cash, is designed to “generate opportunity from chaos” – and he believes there is far more chaos coming.
His bets paid off this week as global stock markets collapsed, rallied and then fell again. Artemis is designed to benefit from such periods of turmoil and volatility. Market volatility, measured by the Chicago Board Options Exchange (CBOE) Volatility index known as Vix or the “fear index”, spiked 84% on Monday – the biggest one-day increase since the 1990s. It hit 50 on Tuesday and was around 30 on Friday, far higher than it has been for the last two years when it only poked above 15 a couple of times.
“It’s been a good week,” Cole said in a interview with the Guardian. “The explosion in the Vix and the rise in volatility is something we have been predicting, and waiting for, for a long time. We were well prepared to benefit from it.”