In recent years professional traders have turned to exciting new exchange traded products such as XIV and VXX in an attempt to turn market volatility into a tradable asset class. While short-term returns have at times been impressive, the lack of risk management has led to very large portfolio drawdowns during market declines and weak long-term returns.
Our VTS Tactical Volatility Strategy is unique as we focus primarily on mitigating risk and have developed dynamic indicators that successfully reduce losses to the least possible amount. We understand the secret to long-term success isn’t making big gains when the markets cooperate. The real secret is not giving it back when they don’t.
Due to favorable market conditions, volatility ETP trading has exploded in popularity in the last couple years but in my opinion the majority of traders are far too aggressive. Their seemingly impressive performance in many cases is simply the result of a consistently upward sloping VIX Futures Term Structure in the last few years.
When the markets turn the other way (which they will at some point) it’s going to be the average investor that takes the biggest hit. Volatility trading is a lot harder than this new wave of fund managers are acknowledging.
Diversify your portfolio, allocate conservatively, and only focus on safer strategies so you don’t end up turning this fantastic volatility trading opportunity into a liability when markets don’t cooperate.
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Traditional portfolio management typically holds positions in stocks bonds and gold in an attempt to diversify client portfolio’s. While this strategy sounds fine in theory, in practice the reason it doesn’t work as advertised is because each of those asset classes suffer significant drawdowns along the way which undermines the long-term performance. Stocks down over 50% in 2008, or gold down 45% in the last few years, etc.
Our Tactical Balanced Strategy solves this problem by only allocating money into the strongest signals within each asset class. We still remain diversified in stocks bonds and gold but aren’t subject to those crashes and in the end our returns are substantially higher with far lower drawdowns.
When viewed in the short term, markets tend to just chop around sideways not making any dramatic moves in either direction. It’s rare that the S&P 500 for example will move more than 7 or 8% either way in any one or two month time period. Yet still the vast majority of traders simply take long or short positions in traditional asset classes completely missing out on this unique trading opportunity.
Our VTS Iron Condor Strategy is perfectly designed to capture profit when markets just chop around without any definitive direction, and then we apply our layers of risk management to deal with the rare times when they do move significantly.
It’s our opinion that everyone should have at least some derivative exposure, making the VTS Iron Condor Strategy a great addition to any long term balanced portfolio.
In the last few decades an astonishing 85% of active fund managers failed to beat their benchmarks which begs the question: Why do people continue to pay high management fees for such widespread underperformance?
At Volatility Trading Strategies we make it clear from the outset, our goal is to outperform passive investing to ensure that people are getting maximum value added for their trust in our management, and our Total Portfolio Solution is the embodiment of that promise.
Exceptional performance, unparalleled risk management, at just a fraction of the fees. That’s our commitment to you.
Founder of Volatility Trading Strategies
Brent Osachoff is the founder of Volatility Trading Strategies, a website dedicated to the education and development of diversified investment solutions in volatility and derivatives.
A graduate of Simon Fraser University in Canada with a B.A. Economics, Brent has 10 years of extensive experience in developing quantitative trading strategies.
Brent Osachoff is also a volatility strategist at Invest In Vol, The Volatility RIA.
Invest In Vol is the only Registered Investment Advisor (RIA) offering clients a diverse set of volatility strategies in one managed account.
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What subscribers say
“After years watching my investment portfolio go nowhere, and then still having to pay high management fees to my advisor, I lost trust in fund managers and the financial industry in general.
After subscribing to Volatility Trading Strategies I get the best of both. My retirement fund is growing faster than ever, and I’m paying just a fraction of the fees I used to.”
“I’ve always wanted to play a more active role in my investing, but with a family and a full time job I just didn’t think I had the time.
But the Total Portfolio Solution is so easy to follow. Just a couple minutes a few times per month and I get great performance without ever having to pay a financial advisor.”
“I lost a significant portion of my retirement fund in the financial crisis of 2008, and it looks like very little has changed since then. Regulations were not improved, nobody was held accountable, and it seems to be business as usual.
It gives me peace of mind knowing that this time around I will be profiting from the very same volatility that was the cause of my losses back then.”
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