Regular readers of TME know our long standing stance on hedging and protection: you buy insurance before the house has started burning. Otherwise you end up paying rich premiums…
Here we are, VIX exploding to the upside, and investors having abandoned hedges just before this downturn.
Chasing VIX here is only for the people that think we are crashing further.
Most people tend to confuse direction with pace. Before grabbing rich protection here, you must ask yourself at what pace will things move.
Very few have this discretion today as p/l pain is driving current hedging behaviour.
Last time VIX was here, Spoos was some 300 handles lower. That itself is not a valid “argument” for obvious reasons, but it shows some of the panic.