As reported in a recent Asian Investor article, CQS has launched the CQS Global Volatility Fund. The fund is beginning with AUM of $160 million and has a strategy that tries to profit on equity volatility valuation anomalies within market indices and on market dislocations, including the volatility of individual global equities. Not surprisingly, the fund will rely on options and futures to take positions in the volatility-driven valuation anomalies. CQS had previously launched an Asian convertible arbitrage hedge fund in 2007 that focused on convertible bond and equity strategies in Asia, also with a global volatility bias. Whether this is yet another sign that volatility has peaked, as is often the case when new funds chase the next new thing, is yet to be seen.

The Chicago Board Options Exchange has introduced a Crude Oil Volatility Index (OVX), similar to the CBOE VIX which tracks volatility and fear in the stock market. The contracts have 30 day contract durations and allow traders to profit from oil trading in both directions. The OVX holds near-term futures contracts and cash to compute the level of volatility in the West Texas Intermediate crude markets. Should you trade it? As John Carter from Trade the Markets was recently quoted in a CNBC article: "I wouldn't see a lot of applications for the retail investor unless they're a little more sophisticated." Good advice indeed. It is also interesting how these types of vehicles seem to come out just as the markets they are taping into are topping or rolling over. Makes you wonder - but that is a discussion for another day. Adam Warner over at the Daily Options Report also had a nice post a few months back about using the VIX, but not trading it, since it is a derivative of a derivative. Furthermore, with retail VIX trading the guy on the other side of the trade probably knows more than you do. The post is still worth a read. Check it out.