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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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