Mon, Jul 6, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: The curious case of Asian volatility

Thursday, September 12, 2013

This piece was contributed by David Shin, Associate Director, PAAMCO Singapore

The volatility of volatility is generally higher in Asian markets than in other developed markets. Also, Asian markets typically have skews much lower than those in the West, and we believe a key reason for this is the plethora of structured products sold in the region.

While there are many types of option-linked structured products, some of the most widely issued products in the region are notes designed by bankers to pay a slightly higher yield under "certain conditions." Volatility is often referred to as the "investor fear gauge" as it is generally higher in times of distress.

In the last 15 years there have been several panic situations: the Asian Crisis in the late 90s, the demise of the tech bubble in the early 2000s, the SARS scare in Asia in 2003, and most recently, the global financial crisis of 2008. All these large distress events led to episodes of increased volatility (in some cases radically so). It has been a little less than five years since the last "big event" and volatility levels have reverted to near pre-crisis lows, even though there are still several macro risks and the economies of many developed and developing countries look weak. This drop in volatility can be partially attributed to the provision of liquidity by central banks around the globe to many investors who, in search of yield,......................

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. Opalesque Exclusive: New systematic strategy managed alongside research firm outperforms S&P500[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: An emerging CTA manager explains how he runs his strategy, which is based on an index produced by a research firm. Peter Turk is head of

  2. Opalesque Exclusive: New systematic strategy embraces machine learning[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The founder of a New York-based systematic trading firm, which offers a hybrid between alpha strategies and alternative feta at lower fees, describes his approa

  3. Larry Robbins' hedge fund Glenview buys 1m Tenet Healthcare shares[more]

    Komfie Manalo, Opalesque Asia: Glenview Capital Management said it bought an additional 979,482 shares at Tenet Healthcare Corp valued at $53.80 million, raising its stakes in the healthcare services company to 15.16%, reported

  4. Legal - Grayson’s hedge funds under scrutiny for possible ethics violations, Court rejects hedge fund’s motion to block merger of Samsung affiliates[more]

    Grayson’s hedge funds under scrutiny for possible ethics violations From Freebeacon.com: Rep. Alan Grayson is finding himself in hot water over managing hedge funds that bear his name, actions that are in possible violation of House ethics rules. Sitting members of Congress are prohibite

  5. Hedge funds decline in June as stocks tumble on Greek woes[more]

    From Bloomberg.com: Hedge funds posted losses across strategies last month as uncertainty over whether Greece will remain in the euro sent global stock markets tumbling. Winton Capital Management declined about 3.1 percent in June in its $12.1 billion Winton Futures Fund, leaving it down 1.9 percent

 

banner