Volatility Creates Opportunity

Shawn Gibson

28 January 2022


If there was ever a doubt of the volatility landscape of 2022, one might reasonably conclude that the rollercoaster we’ve see this month is a good indication of what’s to come. We are seeing equity and credit markets struggle while trying to recalibrate to the signaling by the Fed of the beginning to the end of the easy money policy that has fueled the markets since the Great Financial Crisis.  The uncertainty of the timing of this unwinding, along with various global macro factors, have resulted in increased market volatility, creating a meaningful opportunity for investors to use it to their advantage instead of trying to buck the trend. 

Our Overlay Strategy is designed to benefit from the likely scenario that prolonged uncertainty will lead investors to continue to overestimate future market volatility and, as such, overpay for market protection.  In a highly risk-controlled manner, our Overlay Strategy capitalizes on this persistent mispricing phenomenon of future market volatility to make money for investors. For anyone interested, we are happy to further discuss the volatility landscape of 2022 and how our Overlay Strategy can benefit from it.


The assertions and statements in this blog post are based on the opinions of the author and Liquid Strategies. The examples cited in this paper are based on hypothetical situations and should only be considered as examples of potential trading strategies. They do not take into consideration the impact that certain economic or market factors have on the decision making process. Past performance is no indication of future results. Inherent in any investment is the potential for loss. 

Shawn Gibson

Shawn Gibson co-founded Liquid Strategies in 2013 and serves as the Chief Investment Officer and Portfolio Manager.