Tail risk hedging with VIX calls (Stanford MSE448 final)

A few years ago, while in the last year of my PhD at Stanford, I published this blog post on using VIX calls to hedge against severe market downturns. The full report from the quantitative finance class (MSE448) I was taking used to be available online and generated some interesting conversations, but I can no longer find it hosted by Stanford. So I’m posting a copy of the PDF here!

This also deserves an update with the recent market volatility factored into it. With any luck, I’ll get around to it.

Tail risk hedging with VIX calls

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