Protecting Against a Market Mutiny with Tail Risk, Convexity, & Long Vol on The Derivative

Has anyone been having fun the past few days? The “market”, as if there’s only one, has been in free-fall as the world tries to figure out what this Corona Virus will look like in terms of a possible global pandemic, down -8% in a week. That’s not a terribly huge move in the grand scheme of things, but the veracity and speed at which it’s gone down (and the lack of the 2009-2019 trademark bounce-back) has been a little worrisome. The basic question is how do you protect against this:

The folks at Black Pearl Management have been working on this for a while, launching their Mutiny Investment program to meet this specific need of a sort of ‘on demand’ stock market sell off protection, and we were lucky to sit down with them earlier this month for a recording of our podcast The Derivative In their words:

We covered the many facets of long volatility and tail risk exposure, picking the brains of Mutiny investment program founders Jason Buck and Taylor Pearson, whose program invests in half a dozen VIX and volatility trading programs in a multi-manager, multi-strategy approach. Our talk was wide ranging, including why the whole world is short vol, If squirrels and deer are the natural buyers of forest fire insurance, why Jason hates sports, debit card investing, the interesting idea of an entrepreneurial put option, and what in the world a Brazilian Super Bowl champion is.

For more on the Mutiny program, visit their website and/or see Taylor Pearson’s wonderful website full of interesting essays on all sorts of life topics (here’s the one on antifragile investing) and here’s links to the show on a few of the popular podcast platforms. Enjoy!

Find the full episode links of The Derivative below:

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