This is a summary of links featured on Quantocracy on Wednesday, 12/20/2023. To see our most recent links, visit the Quant Mashup. Read on readers!
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Trend Following VS. Volatility Capping: Two Kinds of Insurance [Return Sources]An equity investor can purchase two kinds of financial insurance. The first, more straightforward kind, is a put option. This contract simply pays off when the S&P 500 (which well use as our stand-in for equity) goes down. In other words, its like any other insurance contract. It protects you against losses from a specific event by rising in value when the event occurs.