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Taylor Lukof
Founder & CEO at ABR Dynamic Funds, LLC
Taylor Lukof, a talented individual, graduated Cum Laude with a Bachelor's degree in Business Administration from Bucknell University. Additionally, he studied at Germantown Academy, showcasing a dedication to academic excellence.
With a strong background in the finance industry, Taylor Lukof has held notable positions in various organizations. He served as the Founder & CEO at ABR Dynamic Funds, LLC, demonstrating his leadership and entrepreneurial skills. Moreover, he has also been the Founder & Managing Member at ABR Management LLC, exhibiting his expertise in fund management and business operations.
Highlights
Last Monday, Aug 5, the VIX index briefly touched 65 pre-open, and ended the day at 38, nearly double from the prior Friday. By the end of the week, the VIX closed at 20, down on the week. So how could investors have played this move?
Interestingly, both long exposure to VIX futures (in white) and short exposure to VIX futures (in blue) were each down about 12% on the week (see chart below).* This means if you put 100 dollars into going long VIX futures on Friday Aug 2nd or 100 dollars into going short VIX futures on Aug 2nd, you would have lost 12% by the next Friday either way. What???
- How rare is this?
Historically, seeing both long and short VIX futures indices down in the same quarter happens in about 10% of all quarters, but it is rarer to see it in a single week.
- Why/how does it happen?
It is generally the result of “volatility drag” from a large roundtrip. These large roundtrips have typically taken longer than a week in the past, but last week brought a dizzyingly fast roundtrip in the VIX Index from 23.39 to 38.57 and all the way back down to 20.37.
- What is "volatility drag"?
Volatility drag is the term for the fact that if you make 10% and then lose 10%, you are down 1%, not flat (100+10=110 and then 110-11=99). The same is also true of reversing the order and losing 10% before making 10% (100-10= 90 and then 90+9=99).
That’s how both long and short VIX futures (or both long and short anything else) can be down after a quick roundtrip in percentage terms.
*measured by SPVIXSTR Index and SPVXSPI Index, respectively
Contains no advice. Past performance does not guarantee future results, and all investing involves risk, including the loss of principal. It is not possible to invest directly in an index.
The time has come!
We are incredibly proud of Zain Retherford's journey and dedication as he represents Team USA in Men's Freestyle Wrestling at 65KG this weekend.
Zain's commitment to excellence, both on and off the mat, embodies the spirit of hard work and perseverance.
Tune in to watch Zain compete tomorrow and Sunday. Streaming live on Peacock, information available at the link below:
https://lnkd.in/eFgpwjw7
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