Part 3/8:
The recent spike in volatility, reflecting a nearly 45% increase in one day, underscores potential risks lurking in the market. As Digle points out, historical events such as the “Deep Seek” incident—where Nvidia suffered an unprecedented loss in a single trading session—highlight the frailty and interconnectedness of modern stock valuations.
Returning to Downside Volatility Hedging
After stepping back from the downside volatility hedging business in 2010, Digle's recent return is fueled by several shifts in market dynamics. He cites drastic changes in market liquidity, inflation rates, and the behaviors of key market players as catalysts prompting his renewed interest.