While not necessarily news to those who have been in on the volatility game for a while, BlackRock's decree to the world that volatility is an asset class should open more investor's eyes to this excellent trading vehicle.
BlackRock, which manages $3+ Trillion in assets, specifically prefers to sell equity volatility -- a common theme here at Trading Volatility as well as with many others who have come to love shorting VXX, UVXY or being long XIV and ZIV over the past few years.
A couple quotes via the Forbes article:
"Volatility is an asset class that can be harnessed to increase returns and reduce risk, according to the firm. BlackRock favors selling volatility via futures on the CBOE Volatility Index (VIX), puts on the Standard & Poor's 500 index and other securities, and variance swaps. These short volatility strategies are integrated into the equity allocations of investment portfolios."
"Selling volatility on a broad equity index has a positive expected return premium over time, as the seller effectively provides insurance to the buyer of volatility"
