February 5th, 2018. A popular short-volatility product lost about ninety percent of its value overnight and was effectively wiped out. Traders who safely collected premium for two years gave it all back in hours. Why? Losses cluster. In a crash the price gaps, volatility explodes, and correlations go to one, so every short position loses at once. That’s how one bad day blows an account. Watch the full video for the fix. Educational only, not financial advice.
Full breakdown: https://youtu.be/yDw1uwCSSyg
#volmageddon #shortvolatility #optionstrading #riskofruin #marketcrash
