It is well established that the VIX Index tends to be negatively correlated with equity markets. This suggests that VIX futures and options may have the potential to provide significant diversification benefits for traditional portfolios. However, since the term structure of VIX futures is...

In his Berkshire Hathaway annual newsletter to investors c.20 years ago, Warren Buffett while discussing the Long Term Capital Management LTCM and Enron collapses, famously called derivatives: "financial weapons of mass destruction, carrying dangers that, while now latent, are potentially...