The MIAX and Tradier Virtual Trading Innovation Event brought together renowned experts in the world of trading to share their insights and strategies on volatility trading. The event started with Dan, the CEO of Tradier, talking about the company's commitment to education and providing choice, great service, and value to active traders. He highlighted that Tradier is creating a singular platform that combines education, choice, and service for active retail traders to access all the platforms and content they need.
Throughout the event, discussions showcased various perspectives, approaches, and techniques for managing risk and taking advantage of opportunities in a volatile market. The speakers covered various topics, including contrarian investing in volatile markets, options strategies that thrive on volatility, understanding implied volatility and more. The event provided valuable insights and strategies for traders looking to master volatility.
The MIAX and Tradier Virtual Trading Innovation Event was a success, with a diverse group of experts sharing their knowledge and experiences in the industry. The event was a great opportunity for traders to learn new strategies, expand their knowledge, and network with other professionals.
In this summary blog, we will take a closer look at the key takeaways from the event, providing valuable insights for traders looking to master volatility.
In-Depth Discussions on Volatility Trading
During the MIAX and Tradier Event, various expert speakers and panel discussions delved into the complexities of volatility trading. Covering a wide range of topics, from understanding volatility as an asset class to managing portfolio risk and trading strategies, participants shared their knowledge and experiences with attendees. These informative sessions provided valuable insights and practical tips for traders looking to navigate the often-challenging world of volatility trading.
Volatility as an Asset Class: Strategies and Perspectives
Dan, the CEO of Tradier, emphasized the importance of understanding the opportunities and risks associated with volatility in his opening remarks. He outlined the company's commitment to providing education and choice to active traders through a singular platform. The discussion also highlighted the significance of volatility as an asset class with a true negative correlation, making it suitable for contrarian investing.
Another speaker, Joe Tigay, shared his portfolio management strategy, which involves a systematic approach to holding volatility futures and an opportunistic approach to rebalancing. The panel further discussed topics like implied volatility, skew, fat tails, and zero DTE implied volatilities. Experienced traders shared the goals of their tail risk hedge fund, which aims to generate substantial returns during moments of market stress.
Understanding Implied Volatility and Skew
The speakers explored the concept of implied volatility and how it differs from realized volatility. They emphasized the importance of recognizing the disconnect between the two to identify opportunities for finding underpriced options. The discussion also touched upon how implied volatility serves as a forward forecasting tool for options pricing.
In another session, the panel focused on understanding skew in option pricing and how it creates trading opportunities while managing portfolio risk. They explained that skew emerged after the 1987 market crash and highlighted the different behavioral dynamics in asset classes such as equities and crypto.
Fat Tail Trading and Zero DTE Options
The experts delved into fat tail trading, a strategy that involves purchasing cheap options that can reprice significantly higher during market volatility. They discussed the importance of caution when trading options, especially out-of-the-money ones, and the need for an exit rule to avoid potential losses.
Additionally, the speakers touched upon zero DTE options and their impact on various market participants, from retail investors to wealth advisors. They also discussed the risks and benefits associated with zero DTE trading for clearing firms and market makers.
Managing Portfolio Risk and Trading Strategies
David Verbrugen, a former pilot turned trader, shared strategies to protect and benefit from market volatility. He warned of potential warning signs for a future market drop, suggesting that traders prepare for market volatility by defining a bear market using exponential moving averages and considering protective strategies like going to cash.
Lastly, the introduction of Spikes as a new way to trade volatility was discussed, offering cost-efficient options for expressing views on the futures maturity curve. The experts compared the differences between VIX and SPIKES, highlighting their unique features and potential benefits for traders.
Closing Thoughts on the MIAX and Tradier Virtual Trading Innovation Event
The MIAX and Tradier Virtual Trading Innovation Event offered a wealth of knowledge and insights for traders looking to navigate the complexities of the markets. The event's panel discussions covered a broad range of topics related to volatility, from managing risk and identifying opportunities to understanding the nuances of implied volatility, skew, and fat tail trading.
Some key takeaways from the event include the importance of having a systematic approach to managing volatility, the need to be cautious when trading options, and the potential benefits of using cost-efficient options like Spikes to express views on the futures maturity curve.
As we move forward in a constantly evolving market environment, it is essential to stay informed, adaptable, and forward-thinking.
The MIAX and Tradier Virtual Trading Innovation Event provided a valuable platform for traders to do just that, and we look forward to seeing the future innovations and strategies that arise from these discussions.