Profiting from ups and downs
As Asia's retail investors grow more sophisticated, new structures have emerged to cater to their newfound taste for volatility. How well understood is the concept of trading volatility as an asset class in Asia?
Asian investors have for some time been familiar with the concept of selling volatility for premiums through structured products. Typically, investors have sold volatility - whether knowingly or not - through their investments in structures such as daily range accruals or equity-linked notes. But a new breed of structured products has started to expose Asian investors directly to volatility as an asset class.
Formerly, investors who bought structured products inevitably had a directional view on
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