Artemis’s Cole is finding ‘crisis alpha’ in volatility markets

Relative value volatility strategies can generate absolute returns and protect investors from hidden market risks and tail events

In a world of uncertainty, volatility can be an unlikely saviour

Donald Rumsfeld was on to something when he contemplated the importance of ‘known unknowns’ and ‘unknown unknowns’ in a famous 2002 press briefing. True knowledge is not what you know but certainty in what you do not. Trading volatility is about putting a price on that. The trader of volatility must be able to identify those Rumsfeldian ‘known unknowns’ and ‘unknown unknowns’ and simultaneously make a market in both.

Buying a Vix future, variance swap or put option provides exposure to the