Investors turn to hybrid equity strategies as volatilities descend to three-year lows

There is still good value in owning volatility as a risk management tool, either as an overlay to a long equity portfolio or to replace long equity exposure with the upside strategies, says Deutsche Bank strategist

Deutsche Bank sees surge in demand for hybrid equity options

Investors are opting for hybrid equity strategies, as implied and realised volatility plummet to near three-year lows amid resilience in equity markets, according to a strategist at Deutsche Bank.

“The low levels of volatility are a continuing trend we have observed since the beginning of the year,” says Pam Finelli, strategist at Deutsche Bank in London. “What’s interesting is that while volatility had been declining, until recently skew had stayed pretty steep, indicating some ongoing risk