Och-Ziff buys $12bn of options on US equities

[GoalSeeker]

Daniel Och’s hedge-fund group bought options on almost $12 billion of U.S. stocks during the first quarter, a move that may generate profits if markets turn more volatile this year.

“The only reason you would want to do this is if you were massively concerned about the markets on the whole and expected volatility to rise,” Rich said in an interview. “Going from zero to this is very, very significant.”

Only once before did the holdings equal more than 1 percent of reported equities, In March 2006.

Interesting article, what do you guys think.. dispersion trading or just betting on market volatility? and what are your expectations on the market this year.. from what i have been seeing, the stock correlation is very high currently in US and even more so in Asia and Europe, making it absolutely senseless putting your time n effort in picking stocks.. when all are behaving the same

http://www.bloomberg.com/news/2011-...t-turbulence-with-12-billion-options-bet.html

 

[joel_b]

I don't necessarily agree on the correlation, my mean reversion strategy was doing pretty good this year until May. Well, good in Jan Feb, Apr, Flat in March, bad in May. If it's going to get volatile, I'm in for it!

 

[menovive]

Long straddles.

 

[GoalSeeker]

Can't say about the volatility, but i believe the correlations can not stay that high for any longer.