This podcast episode interviews Kris Sidial about tail risk hedging strategies, focusing on how to protect investment portfolios from extreme market downturns. The discussion covers defining tail risk hedging, the use of derivatives (options) for hedging, the role of the VIX volatility index, and examples of historical market crashes where such strategies thrived (e.g., March 2020). Sidial emphasizes the importance of understanding option pricing and the reflexive nature of markets, highlighting the potential for significant returns during market panics while minimizing losses during normal periods. Investors can use this information to better understand and potentially incorporate tail risk hedging into their investment strategies for portfolio protection.
