VIX Not The Hedge It’s Supposed To Be?

My latest post for Alpha Baskets looks at the extent to which VIX works as a hedge for equities downside, accept for the times that it doesn’t.

The logic is simple, fear/uncertainty increases as stocks go down so the VIX rises and the products tracking it then hopefully capture some of that reaction. I’ve always been skeptical of this because it is possible that stocks go down and the VIX also go down which is what happened on Monday as shown in this chart from Yahoo Finance.

Please click through to read the entire post.

Looking back at Vernazza from the start of the trail that goes to Montorosso.

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