There’s a surefire way to make a killing on the type of turmoil that sends stocks spiraling

Reuters/Lucas Jackson

• BNP Paribas has figured out a strategy that helps investors make money following volatility spikes.
• The market was recently jolted out of a period of complacency, and BNP says that it was a perfect example of the type of volatility increase that creates opportunity.

When the Cboe Volatility Index (VIX) was awakened from its prolonged slumber earlier this month, the consensus was that it was a very bad thing for markets.

This was largely due to the cottage industry that had cropped up with the sole purpose of making a quick buck by shorting the VIX. That short-volatility trade blew up when the VIX jolted higher, causing the collapse of two wildly popular exchange-traded products, which in turn worsened equity selling.

See the rest of the story at Business Insider

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See Also:

• There’s a surefire way to make a killing on the type of turmoil that sends stocks spiraling
• MORGAN STANLEY: The stock market’s meltdown was just an ‘appetizer’ — here’s how to protect against the next sell-off
• The implosion of a wildly popular trade was actually a good thing, Morgan Stanley’s US equity chief says

SEE ALSO: A new part of the market is melting down as panicked investors get another ‘wake-up call’