Many capital market practitioners use options to take views on the direction of a market, or to hedge a portfolio against an adverse market move in a specific direction. However, option market-makers and other players often use options in a completely different way – to trade the volatility of a market, rather than the direction of the market. This trading paradigm has become more significant since the subprime crisis and with the increasing correlation between asset classes.

If it is possible to trade a market’s volatility, should volatility be considered a separate asset class? If so, are there risk/reward benefits to including this asset class in a portfolio’s asset allocation? What are the best ways to trade the volatility of a market?

On Wednesday, July 30, 2014 featured speaker Udi Sela, Vice President and Solutions Product Manager at Numerix, discussed how volatility can be traded as a separate asset class, using FX market examples to illustrate different ways to trade FX volatilities.

Mr. Sela covered:

  • Why volatility is a separate asset class
  • Current volatility levels in the FX markets
  • Examples of trading volatility, using:
    • Straddles
    • Strangles
    • Variance swaps
    • Digital options
  • Analyzing the results, given various possible outcomes
  • Selling volatility

 

To view the on-demand webinar, just register on the right side of this page.

Featured Speakers:

Udi Sela, Vice President & Solutions Product Manager, Numerix
Udi Sela has worked in the Foreign Exchange (FX) derivatives markets for 20 years. A senior derivatives trader and trading manager at Citibank and JPMorgan, he has developed expertise in derivatives spanning both vanilla and complex FX options. For the last eleven years, Sela has led product development and pre-sales functions within a range of financial software vendors.

Moderator: Jim Jockle, Chief Marketing Officer
Mr. Jockle leads the company's global marketing efforts, spanning a diverse set of solutions and audiences. He oversees integrated marketing communications to customers in the largest global financial markets and to the Numerix partner network through the company's branding, electronic marketing, research, events, public relations, advertising and relationship marketing.

Prior to joining Numerix, he served as Managing Director of Global Marketing and Communications for Fitch Ratings. During his tenure at Fitch, Mr. Jockle built the firm’s public relations program, oversaw investor relations and led marketing and communications plans for several acquisitions. He also oversaw the brand development of a new company dedicated to the enhancement of credit derivative and structured-credit ratings, products and services. Prior to Fitch, Mr. Jockle was a member of the communications team at Moody's Investors Service.

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