Asian vol trading

Asian investors warming to volatility trading

US and European investors have been investing in volatility as an asset class for some time, but it has not caught on in Asia. That could be about to change.
Michael Wexler, Maple Leaf Capital
Michael Wexler, Maple Leaf Capital

In the US and Europe, an increasing number of investors, and some corporations, have woken up to the potential of volatility as an investable asset class that provides effective hedging and, hopefully, profits in difficult market conditions. A strategy that is particularly appealing in times of extreme market turbulence, volatility displays inverse correlation with traditional asset classes and has been making Western hedge funds money throughout the financial crisis.

The view from Asia is different. “Volatility as an asset class, and volatility hedge funds, are of limited interest for non-Japan Asian investors,” said Michael Wexler, founder and chief investment officer at Maple Leaf Capital, a volatility arbitrage hedge fund based...

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