{"product_id":"the-second-leg-down-isbn-9781119219088","title":"The Second Leg Down","description":"\u003cb\u003eCut risk and generate profit even \u003ci\u003eafter\u003c\/i\u003e the market drops\u003c\/b\u003e \u003cp\u003e\u003ci\u003eThe Second Leg Down\u003c\/i\u003e offers practical approaches to profiting after a market event. Written by a specialist in global macro, volatility and hedging overlay strategies, this book provides in-depth insight into surviving in a volatile environment. Historical back tests and scenario diagrams illustrate a variety of strategies for offsetting portfolio risks with after-the-fact options hedging, and the discussion explores how a mixture of trend following and contrarian futures strategies can be beneficial. Without a rational analysis-based approach, investors often find themselves having to cut risk and buy protection just as options are at their most over-priced. This book provides practical strategies, expert analysis and the knowledge base to assist you in recovering your portfolio.\u003c\/p\u003e \u003cp\u003eHedging strategies are often presented as expensive and unnecessary, especially during a bull market. When equity indices and other unstable assets drop, they find themselves stuck – hedging is now at its most expensive, but it is imperative to hedge or face liquidation. This book shows you how to salvage the situation, with strategies backed by expert analysis.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eIdentify the right hedges during high volatility\u003c\/li\u003e \u003cli\u003eGenerate attractive risk-adjusted returns\u003c\/li\u003e \u003cli\u003eLearn new strategies for offsetting risk\u003c\/li\u003e \u003cli\u003eKnow your options for when losses have already occurred\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eImagine this scenario: you've incurred significant losses, you're approaching risk limits, you must cut risk immediately, yet slashing positions would damage the portfolio – what do you do? \u003ci\u003eThe Second Leg Down\u003c\/i\u003e is your emergency hotline, with practical strategies for dire conditions.\u003c\/p\u003e \u003cp\u003ePreface xi\u003c\/p\u003e \u003cp\u003eAcknowledgements xiii\u003c\/p\u003e \u003cp\u003eAbout the Author xv\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Introduction 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Airplane Ticket Trade 1\u003c\/p\u003e \u003cp\u003eThe Bull Cycle 2\u003c\/p\u003e \u003cp\u003eThe Renegades 3\u003c\/p\u003e \u003cp\u003eClaws of the Bear 3\u003c\/p\u003e \u003cp\u003eZugzwang 4\u003c\/p\u003e \u003cp\u003eThe Sceptics 5\u003c\/p\u003e \u003cp\u003eA Sad Truth 5\u003c\/p\u003e \u003cp\u003eCommon Mistakes 6\u003c\/p\u003e \u003cp\u003eImprecise but Effective 7\u003c\/p\u003e \u003cp\u003eHedging Against Implausible Scenarios 8\u003c\/p\u003e \u003cp\u003eA Black Swan in Correlation 8\u003c\/p\u003e \u003cp\u003eTaking Profits 8\u003c\/p\u003e \u003cp\u003eThe Good, the Bad and the Ugly 9\u003c\/p\u003e \u003cp\u003eThe Great Escape 9\u003c\/p\u003e \u003cp\u003eHaving a Plan 10\u003c\/p\u003e \u003cp\u003eTrend Following as a Defensive Strategy 11\u003c\/p\u003e \u003cp\u003eTaking the Offensive 12\u003c\/p\u003e \u003cp\u003eThe Pre-Conditions for Market Crises 12\u003c\/p\u003e \u003cp\u003eBanks: The Great Multiplier 13\u003c\/p\u003e \u003cp\u003eA Change in Risk Regime 13\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 “Safe” Havens and the Second Leg Down 14\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Matterhorn 15\u003c\/p\u003e \u003cp\u003eMrs. Watanabe’s No. 1 Investment Club 18\u003c\/p\u003e \u003cp\u003eThe Risk of What Others are Holding 19\u003c\/p\u003e \u003cp\u003eThe Risk of What Others are Likely to Do 22\u003c\/p\u003e \u003cp\u003eHere We Go Again 24\u003c\/p\u003e \u003cp\u003eSummary 28\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 An Overview of Options Strategies 29\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Building Blocks: Calls and Puts 29\u003c\/p\u003e \u003cp\u003eWhy Buy a Call or Put? 34\u003c\/p\u003e \u003cp\u003eThe Black–Scholes Equation and Implied Volatility 36\u003c\/p\u003e \u003cp\u003eThe Implied Volatility Skew 38\u003c\/p\u003e \u003cp\u003eHedging Small Moves 38\u003c\/p\u003e \u003cp\u003eDelta Hedging: The Idealised Case 39\u003c\/p\u003e \u003cp\u003ePractical Limits of Delta Hedging 41\u003c\/p\u003e \u003cp\u003eHedging Options with Other Options 43\u003c\/p\u003e \u003cp\u003ePut and Call Spreads 43\u003c\/p\u003e \u003cp\u003eStraddles and Strangles 44\u003c\/p\u003e \u003cp\u003eThe Deformable Sheet 46\u003c\/p\u003e \u003cp\u003eSkew Dynamics for Risky Assets 48\u003c\/p\u003e \u003cp\u003eThe 1×2 Ratio Spread and Its Relatives 50\u003c\/p\u003e \u003cp\u003eThe Batman Trade 53\u003c\/p\u003e \u003cp\u003eImplied Correlation and the Equity Index Skew 56\u003c\/p\u003e \u003cp\u003eFrom Ratios to Butterflies 59\u003c\/p\u003e \u003cp\u003eCalendar Spreads 65\u003c\/p\u003e \u003cp\u003eSummary 67\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Hedging the Wings 68\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTaking the Other Side of the 1×2 68\u003c\/p\u003e \u003cp\u003eComparing the 25 and 10 Delta Puts 69\u003c\/p\u003e \u003cp\u003eHedging Sovereign Bond Risk 78\u003c\/p\u003e \u003cp\u003eSelling Put Ratio Spreads on the S\u0026amp;P 500 83\u003c\/p\u003e \u003cp\u003eThe Hypothetical Implied Distribution 83\u003c\/p\u003e \u003cp\u003eOur Findings So Far 84\u003c\/p\u003e \u003cp\u003eBack-Tests: A Cautionary Note 84\u003c\/p\u003e \u003cp\u003eA Short Digression: Delta-Neutral or Comfortably Balanced? 87\u003c\/p\u003e \u003cp\u003eThe 665 Put 87\u003c\/p\u003e \u003cp\u003eImplications of the Square Root Strategy 88\u003c\/p\u003e \u003cp\u003eFutures vs Spot 89\u003c\/p\u003e \u003cp\u003eA Dramatic Example 89\u003c\/p\u003e \u003cp\u003eA Cross-Sectional Study 91\u003c\/p\u003e \u003cp\u003eThe “New” VIX: Model-Independent, Though Not Particularly Intuitive 94\u003c\/p\u003e \u003cp\u003eThe Spot VIX: Oasis or Mirage? 94\u003c\/p\u003e \u003cp\u003eMigrating to VIX Options 98\u003c\/p\u003e \u003cp\u003eReflections on Figure 4.36 101\u003c\/p\u003e \u003cp\u003eMigrating to Different Markets: The V2X 103\u003c\/p\u003e \u003cp\u003eRisk-Regime Analysis 104\u003c\/p\u003e \u003cp\u003eConditional Performance of Hedging Strategies 106\u003c\/p\u003e \u003cp\u003eSummary 109\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 The Long and the Short of It 110\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eShort-Dated Options 110\u003c\/p\u003e \u003cp\u003eThe Physicists Weigh In 112\u003c\/p\u003e \u003cp\u003eBuying Time 117\u003c\/p\u003e \u003cp\u003eLong-Dated Options 119\u003c\/p\u003e \u003cp\u003eFar from the Madding Crowd 121\u003c\/p\u003e \u003cp\u003eR Minus D 122\u003c\/p\u003e \u003cp\u003eThe Lumberjack Plot 125\u003c\/p\u003e \u003cp\u003eSelective Application of the Weekly Options Strategy 126\u003c\/p\u003e \u003cp\u003eSummary 127\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Trend Following as a Portfolio Protection Strategy 128\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat is Trend Following? 128\u003c\/p\u003e \u003cp\u003eTrend Following Dogma 130\u003c\/p\u003e \u003cp\u003eThe Crisis Alpha Debate 131\u003c\/p\u003e \u003cp\u003eAn Aside: Diversifying Across Time 134\u003c\/p\u003e \u003cp\u003eTaking Advantage of a Correction 135\u003c\/p\u003e \u003cp\u003eThe Niederhoffer Argument 135\u003c\/p\u003e \u003cp\u003eChasing 1-Day Moves 138\u003c\/p\u003e \u003cp\u003ePushing the Analogy Too Far 139\u003c\/p\u003e \u003cp\u003eAnalysing the Data Directly 141\u003c\/p\u003e \u003cp\u003eLEGO Trend Following 142\u003c\/p\u003e \u003cp\u003eSummary 143\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Strategies for Taking Advantage of a Market Drop 144\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Elastic Band 144\u003c\/p\u003e \u003cp\u003eTrading Reversals 147\u003c\/p\u003e \u003cp\u003eMore Texas-Style Hedging 149\u003c\/p\u003e \u003cp\u003eSelling Index Put Spreads 151\u003c\/p\u003e \u003cp\u003eBreathing Some Life into the Equity Risk Premium 152\u003c\/p\u003e \u003cp\u003eBuying VIX Puts 153\u003c\/p\u003e \u003cp\u003eSelling VIX Upside 154\u003c\/p\u003e \u003cp\u003eThe Remarkable Second Moment 155\u003c\/p\u003e \u003cp\u003eSummary 158\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 “Flash Crashes”, Crises and the Limits of Prediction 159\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLord of the Fireflies 159\u003c\/p\u003e \u003cp\u003eCascading Sales 160\u003c\/p\u003e \u003cp\u003eA Concrete Example 162\u003c\/p\u003e \u003cp\u003eAn Aside 162\u003c\/p\u003e \u003cp\u003ePaths, Prints 163\u003c\/p\u003e \u003cp\u003eThe Role of the Central Bank 164\u003c\/p\u003e \u003cp\u003eCredit Cycles at the Zero Bound 164\u003c\/p\u003e \u003cp\u003eThe Monetary Policy Palette 165\u003c\/p\u003e \u003cp\u003eReading the Tea Leaves 168\u003c\/p\u003e \u003cp\u003eSummary and Conclusion 169\u003c\/p\u003e \u003cp\u003eGlossary 171\u003c\/p\u003e \u003cp\u003eReferences 173\u003c\/p\u003e \u003cp\u003eIndex 177\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eHARI P. KRISHNAN, P\u003csmall\u003eH\u003c\/small\u003eD,\u003c\/b\u003e is a fund manager at Cross-Border Capital, where he runs systematic macro and volatility strat-egies. Cross-Border is a London-based hedge fund with roughly US$300 million in assets. He previously managed a CTA for a London-based asset management bou-tique, and he was an executive director and co-head of alternative asset allocation at Morgan Stanley (Chicago and London). In addition, Dr. Krishnan has worked as an options trading strategist and as a senior economist at the Chicago Board of Trade. He received a PhD in applied math from Brown University, and he was a post-doctoral research scientist at the Columbia Earth In-stitute, Columbia University, before moving into finance.   \u003c\/p\u003e\u003cp\u003eImagine this scenario: you've incurred significant losses, you're approaching risk limits, and you must do something in order to curtail your losses immediately. Slashing po-sitions is either impossible or would destroy the integrity of your portfolio – what can you do? Don't panic: \u003ci\u003eThe Second Leg Down\u003c\/i\u003e is your emer-gency hotline. It offers you proven strategies for surviving and thriving under precisely such dire conditions. \u003c\/p\u003e\u003cp\u003eHedging strategies are often perceived as not merely expensive but unnecessary, especially during a bull market. But when equity indices and other unstable assets drop suddenly, in-vestors can find themselves mired and sinking fast– exactly when hedging is at its most expen-sive, but when it's imperative to hedge or face further material losses or even liquidation. \u003c\/p\u003e\u003cp\u003e\u003ci\u003eThe Second Leg Down: Strategies for Profiting after a Market Sell-Off\u003c\/i\u003e shows you how to save the day with proven strategies for cutting risk and maximising profits, even in the most extreme market environments.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990337241317,"sku":"NP9781119219088","price":68.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119219088.jpg?v=1761787412","url":"https:\/\/k12savings.com\/products\/the-second-leg-down-isbn-9781119219088","provider":"K12savings","version":"1.0","type":"link"}