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Some Issues With Tail Risk Hedging [Premium Articles]

In this article, we explore another serious issue with tail-risk hedging with the help of recent data. Access to the full article requires a Premium Articles subscription or an All in One subscription.

In another premium article, we have referred in more detail to several issues investors and traders face in trying to hedge tail risk in the equity markets.

  1. Tail risk hedging is primarily lucrative for the sell side.
  2. The supply of tail risk hedging products is limited by counter-party offerings.
  3. There are counter-party credit risks exchanges attempt to minimize.
  4. There are timing issues with effective tail-risk hedging.

In this article, we introduce another issue with tail-risk hedging that has been present during the current equity market correction.

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Specific disclaimer: This report includes charts that may reference price target levels determined by technical and/or quantitative analysis. No updates to charts will be provided if market condition changes occur that affect the levels on the charts and/or any analysis based on them. All charts in this report are for informational purposes only. See the disclaimer for more information.

Disclaimer:  No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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