Beta-neutral hedge funds manage to VaR, so they mechanically buy more downside protection as volatility rises — meaning by the time markets fall they are racing to hedge into expensive vol, whereas the contrarian-correct move is to buy downside protection now while VIX is low and the protection bought in March/April is rolling off.
causalpending
Speaker
TylerEvidence Quote
“as V goes up, they continue hedging... now is actually the time you buy downside protection because the the V is so low”
Created: 6/18/2026, 2:32:33 PM
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