Low-Volatility

Fed: LETFs Contribute To Stock Volatility

LETFs (leveraged exchange traded funds) may contribute to stock volatility in the same way that portfolio insurance contributed to the 1987 stock market crash, according to recent research done by Tugkan Tuzun at the U.S. Federal Reserve. He argues that the same positive feedback loops, especially during the final hour of trading, exacerbate high volatility, though it may not have a significant effect on the market during times of relative stability.

exclusively for paying members. Access all of our content on including years of timeless investment news and in depth analysis for only a few dollars a month by signing up here while also supporting quality content and journalism, or learn more about our premium content here

If you are subscribed and having an account error please clear cache and then cookies if that does not work email support@valuewalk.com and we will get back to you as quick as humanly possible


Saved Articles
X
TextTExtLInkTextTExtLInk

Subscribe to our mailing list

* indicates required

Opt out of occasional 3rd party offers


0