Featured Research & Press

If It’s a Bull Market, What’s to Worry About?

We care about Skew

Don’t Mess with El Paso

The electricity grid can teach us something about investing

Social Order

Turbulent times enacted on our society is just another chapter

The Edge In Discipline And Time

The Lake Hill ethos

What Are We Rooting For?

Having an edge doesn't guarantee profits. You must be disciplined and patient.

Where do we go from here

Similar to the photosynthesis process, investors could benefit from mitigating the effects of rainy days

The Law of Large Numbers

The core of what we do at Lake Hill

Day Traders and the Stock Market

Market despair and euphoria makes the case for option strategies

Bank Runs in the Time of COVID

Similar to the Fed, investors have access to an expanding set of tools

The Crisis Playbook

Have a plan and execute

Wimbledon Aced It

Strategy, Discipline, and Persistence pays off

Are You Ready for the Next Downturn

The current market environment may be giving you false comfort

Searching for True Diversification

Is there a direct way to hedge the downside without giving up too much of the upside?

How to Prevent Your Options Strategy From Backfiring

Lake Hill quoted in Barrons

Research

Investing In A Roulette Wheel

A simplistic analogy to help explain risk management and capturing an edge in investing

Hedging Left-tail Risk With Right-tail Options

Find the portfolio protection you need without bleeding to death along the way

What Is The Edge And Why Should It Work?

Looking at the difference between implied and realized volatility

Importance Of Properly Sizing Investments

Make portfolio allocation decisions based on both expected and unexpected outcomes

Calibrating Expectations Using Sharpe

Define your risk tolerance and manage your expectations accordingly

Evolution Of Hedging And Derivatives

The history of hedging since the 1800's

The Popularity And Pitfalls Of Weekly Options

Beware the risk of ruin from systematically selling options with negative edge

Shock Scenarios And Understanding The Process

The importance of combining "What if?" analysis with "What then?" processes

Analyses Versus Biases In Bonds And Options

Behavioral biases and preconceived notions can lead to suboptimal decisions

How Long Does One Have To Wait For An Option To Pay Off?

A look at the roulette wheel to understand timing, capital management & the importance of discipline

Options Replication And Delta Hedging

A fundamental lesson about options

Insurance Companies Are Liquidity Providers

Striking similarities and subtle differences between insurance and options

Innovations In Risk Transfer Over The Past 4000 Years

The history of options: Straight outta Mesopotamia

Tail-Risk Hedging By Systematically Buying Puts

A simplistic approach that provides false comfort

Cargo Cult Trading And Option Overlay Performance

Observing that something seems to work can blind you to how badly it can fail

Press

Volatility Investing 2019

Zem Sternberg speaks at London Volatility Investing Event

Volatility Investors Talk Liquidity, Trading Conditions in 2019 - Cboe

Zem Sternberg speaks at CBOE

The Popularity and Potential Pitfalls of Weekly Options

Global Capital featured our letter in a recent publication that was distributed to attendees of the CBOE Risk Management Conference.

Options on Futures: A Market Primed For Further Expansion

TABB Group expects that futures options activity will continue to grow strongly as financial market participants increasingly use these products as part of their investment and hedging strategies.

Futures Options Markets: Ready, Set, Grow

Futures options trading has expanded significantly in recent years as a number of forces have merged to create an enticing proposition for investors.

Calmest Markets in 12 Years as Fed Boosts Confidence: Options

Implied volatility across 29 asset classes has reached a 12-year low.   What does it mean for markets in the face of shifting tides at the Fed?

The One Rule that Explains Trading Success

Discipline is the key one-word explanation for success in almost any field.

TRADING ERRORS: The Case for Adjusting...Not Busting

Simply canceling an options trade is far more dangerous in the options market than in stock or futures markets.

Do you want to be "the house"?

"While the edge is slightly tipped in the house's favor, there is significant volatility that comes with it."

VIX & Vol of Vol Trends

Derivatives Intelligence

Traders Magazine: Seeking Alpha

"New York hedge fund creates value trading index options."

Absolute Return: Investable indices are distorting commodities and futures

"The pricing of commodity and futures markets is no longer in keeping with historical patterns.   Volatility futures and commodity futures have similar themes."

Derivatives Week: Learning Curve

"Investor are always on the hunt for convex payoffs, wanting optionality for little or no cost.   How much should investors pay for positive convexity and how much should they receive for negative convexity."

Watching the Tail (Risk) Wag

"A simple way to investigate the tail is to take the 115 or so years of US stock market data and build a histogram of 3-month returns rolling daily in 10-year windows. This video will show you this analysis in action."

Why The Listed Options Market Does Not Need The Volcker Rule

"Dodd-Frank will likely put additional constraints on banks but it should be careful not to infringe on activities that are working well, particularly those in the equity derivatives markets"