Credit Suisse's Mandy Xu on Volatility, S&P 500 Risk

The transcript discusses the current state of deleveraging in hedge funds, drawing parallels with the January 2018 market period. It highlights the elevated volatility levels, driven by retail activity and macroeconomic uncertainties, and explores strategies for market protection. The discussion also covers hedge fund strategies using options and the potential impact on other asset classes, noting that the recent market phenomena are largely equity-specific and positioning-driven.

What is the current state of the deleveraging process in hedge funds?

• It is not yet started.

• It has been completed.

• It is nearing completion.

• It is just beginning.

What is one reason for the elevated volatility in the market?

• Increased demand for upside calls.

• Decreased demand for upside calls.

• Decreased demand for downside protection.

• Increased demand for downside protection.

What is a key factor contributing to macroeconomic uncertainty?

• Delayed vaccine rollouts

• Stable vaccine rollouts

• Decreasing stimulus

• Increasing stimulus

What is a recommended strategy for hedging at the index level?

• Buying a call and selling a put.

• Buying a put and selling a further out-of-the-money put.

• Buying a call and selling a further out-of-the-money call.

• Buying a put and selling a call.

How have retail trading activities impacted hedge funds?

• By decreasing the demand for upside calls.

• By increasing the demand for upside calls.

• By decreasing the demand for short positions.

• By increasing the demand for short positions.

Which asset class has seen some impact from recent market activities?

• Cryptocurrencies

• Commodities

• Precious metals

• Real estate

What is the current state of volatility in other macro asset classes?

• Moderately volatile

• Extremely volatile

• Highly volatile

• Very muted