State Street Says Short-Volatility Trades Are Storing Up Trouble
- Investors will scramble to cover shorts in downturn: Lacaille
- Cost of ‘emergency’ insurance shows investor concern of crash
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The chief investment officer of State Street Global Advisors is sounding the alarm bell on short volatility trades.
The billions of dollars backing bets that volatility in the stock market will keep sinking lower is “storing up trouble” for the future, according to Richard Lacaille, CIO of the $2.4 trillion asset manager. Investors will scramble to cover their short positions in the event of a rapid reversal, he said.