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Benedicte Gravrand, Opalesque Geneva:

Volatility may have made a brief appearance early last month to reach levels above 50% and wipe away large sums from investors' pockets, but since, it has continued to decline across major equity, bond and currency markets; it is now at 16% on the S&P. So traders are caught between two stances, Reuters reports, the defensive one and the pre-February spike one.

But, according to data from the Chicago futures markets, investors are by and large betting on further volatility. That's including Dominicié, a Geneva-based hedge fund manager founded in 2003, that runs among other things the Cassiopeia UCITS, a fund that employs a volatility arbitrage strategy and uses a model called Myopia Arbitrage (TM).

Cassiopeia, named after a constellation in the northern sky, returned 6.1% in February. The UCITS, launched in June 2015, has annualised 4.7% (USD class).

According to a February monthly report seen by Opalesque, the managers changed their positioning gradually from short to long volatility in the first five days of the month, and thus generated gains on the large volatility blow-out of February 5th.

"Now that the crowded short volatility trade has been washed out, what can we expect?," they write. "The main takeaway is t......................

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