When Volatility Spikes, Financial Things Break - The Case of UK Gilts and Pensions

What is volatility and what causes it to rise and fall? How volatility itself contributes to more volatility such as in the example of the chaotic UK government bond market where long-term yields have increased by 4% in 2022. Topics covered include:How the role of volatility has changed in financial marketsWhat caused UK interest rates to spike and long-term bond investors to lose 50%What is liability-driven investmentWhat drives increases in volatility and volatility spikes and spillovers are more frequentHow to earn income from shorting volatility and what are the risksWhat we can learn when financial securities blow up For more information on this episode click here. Episode Sponsors Masterworks – invest in contemporary art - **Net est. returns for all realized and unrealized offerings is 15.3%, from inception through 6/30/22.  See important Reg A and performance disclosures at masterworks.io/cd Policygenius Show Notes The volatility virus strikes again by Eric Lonergan—Financial Times How ‘Liability-Driven’ Pension Funds Triggered UK Bond Panic by Loukia Gyftopoulou and Greg Ritchie—Bloomberg UK government debt and deficit: December 202—UK Office for National Statistics Markets are more fragile than investors think by Robin Wigglesworth—Financial Times Volatility and the Alchemy of Risk: Reflexivity in the Shadows of Black Monday 1987—Artemis Capital Management What Caused the Volatility “Volmageddon” on 5-Feb-2018 by Vance Harwood—Six Figure Investing Gamma Explained—Merrill Delta Explained—Merrill Inside Volatility Trading: Is VIX Backwardation Necessarily a Sign of a Future Down Market? by Scott Bauer Investments Mentioned WisdomTree CBOE S&P500 PutWrite Strategy ETF (PUTW) Simplify Volatility Premium ETF (SVOL) Related Episodes 159: What You Need To Know About Volatility 283: Why You Should Care About Carry Trades See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.