"The excess buying pressure exerted from the short-volatility complex would then push spot-VIX higher contributing to panic selling in the underlying S&P 500 index and a vicious and self-reinforcing cycle of fear followed by horror."
But first, bad Karma: Today is the Ferrari IPO...
ZH: Oct. 21, 2015
"Celebrating Recovery"
ZH: Oct. 20, 2015
Shorting Volatility: The Last Muppet Show
"Global central banking has artificially incentivized bets on mean reversion resulting in tremendous demand to short volatility"
"Velocity Shares Daily Inverse VIX (“XIV”) is the largest of these short VIX ETPs and has a cult-like following among day traders"
"Many retail investors simply do not understand that short and leveraged volatility ETPs rebalance non-linearly"
"All aboard"
XIV (red) with Nasdaq 100:
