The use of derivatives to boost yield on equity portfolios is growing rapidly, as insurance companies, pension funds and asset managers across the world face the challenges posed by the low interest rate environment and flat equity markets.
A growing number of real money accounts are also trading volatility as an asset class, arbitraging implied versus realised volatility via options on either the Vix or VStoxx indices. Access to volatility arbitrage has been made easier by products such as exchange traded variance futures.
