Wed, Sep 24, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Maple Leaf on how to profit from volatility

Friday, September 07, 2012

Benedicte Gravrand, Opalesque Geneva:

Michael Wexler, veteran volatility trader and co-founder of Maple Leaf Capital, explained in a recent Opalesque TV interview how investors can profit from a high volatility environment. Maple Leaf Capital is an investment management company founded in 2002, with principal offices in London and Hong Kong, and which manages client assets in the areas of volatility trading, illiquid loans, fixed income momentum arbitrage, macro risk, and crash overlay strategies.

According to Wexler, it is possible to profit from volatility because the dislocation in the pricing of options between fair value and actual trading is greater at higher volatility levels.

"The first thing to note about the volatility space is that the bulk of participants in it are not volatility traders," he explains. 99% of investors buying and selling calls and puts, he continues, do so with a directional view in mind. They are not sensitive to the volatility (vol) component. Paying 5% or 6% for a call option will not make much of a difference for them. But for the volatility traders – such as those at Maple Leaf – this difference is huge, and it is one where they can extract value if the option is over or under-priced. Those 99% of investors are what he calls "non-economic traders".

"If you buy a call on......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Outlook - Julian Robertson: There are two bubbles that can bite us[more]

    From Businessinsider.com: Legendary hedge fund manager Julian Robertson gave a warning about two bubbles that could "bite us" at Bloomberg Market's Most Influential Summit. "I agree with the fact that the economy is definitely getting better. I think the cause of that is two bubbles that will

  3. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  4. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  5. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e