QIS

gokinetic

Spot on. And I'll add to above: * **Early 2024 (The "Yield Harvest" Shift):** 0DTE-selling ETFs (e.g. **XDTE** launched March '24) and Bank QIS strategies you mentioned reach critical mass They systematically sell volatility. MMs take the other side, so their **long gamma** acts as a shock absorber. We move from "Degen Era" (2022–23) to "Boring Era" where systematic supply crushes premiums and pins the index.

Dumbest-Questions

I'd also add early 2024 which is when we saw bank QIS (and ETFs for slightly longer horizon) getting involved in 0DTE selling strategies. There was a marked shift from degen-0DTE (almost perpetually rich vol) to boring-0DTE (suppressed realized and as a result suppressed implied vol)

OpDickSledge

If bitcoin is rat poison, QIS swaps are radioactive sludge

princess_dai_13

some of my classmates are in QIS labs and yea atm it is very far from real world utility 

Conscious-Daikon-308

Terms are 100% clear. Every payoff is fully disclosed in the Termsheet. That does not mean it is simple. You can do very simple payoffs (Bond+ Call) to highly specific payoffs (Dispersion… QIS, risk recycling…) and on any kind of underlying.

this_guy_fks

[https://wholesale.banking.societegenerale.com/fileadmin/indices\_feeds/ti\_screen/index.html](https://wholesale.banking.societegenerale.com/fileadmin/indices_feeds/ti_screen/index.html) since inception CTA index +167%, Trend Only Index +238% with no correlation to the spxt. im not sure what "literature" you're referring to, but its pretty plainly incorrect. CTAs/Managed Futures are a great diversifer to a portfolio of long only equities, but adds no value to retail traders, the ETF implementations (CTA/DBMF) are terrible ways to access this return profile, mostly due to limitations around leverage, assets held, and the 40act regs. you would need to open a managed account of access CTAs through a banks channels (DB Select for example) and no retail investor has the capital allocation to support it (otherwise instead of paying 1/15 youd go to your private bank wealth manager and buy a CTA tracker QIS index)

Dang3300

I feel like a lot of QIS programs are dogmatically selling front month VX so it might not be as bad to take a small SVIX position when spot VIX is in the mid 40s Although the term structure is heavily inverted right now

No_Security_6252

Doing my phd in atomic physics (know a lot of QM and quantum info). Quantum computers right now can't do anything meaningful. Both a hardware and software issue. Not only is it extremely challenging to maintain entanglement on a large quantum circuit (hardware), it's not totally clear how to create meaningful quantum algorithms (software). Other than Shor's and Grover's algorithms its not at all obvious how we would get a quantum "speed up" for most problems. So its a verrrry long shot from my perspective. My QIS prof has verbatim said quantum computing is dead. I'm short RGTI and QBTS, which is NFA. But what I can say for sure is do NOT believe the pop science media hype. Every article about quantum tech and the promise new chips is complete nonsense.

lwieueei

I've read the short report on this and it doesn't look good. At all. The current state of quantum computing is insufficient for any kind of practical application. Quantum computing hasn't been demonstrated to be able to handle any kind of calculations so far due to the instability of the qubits and lack of error correction mechanisms to fix random errors in the qubit state. This is further corroborated by the fact that the two largest customers of IonQ: University of Maryland (who is also a related party to the founder Chris Monroe) and the US government are using their services **only for research purposes**. There hasn't been any indication that the US government is using these quantum computers for any kind of practical purposes, which is supported by the nature of the deal the US government and US Air Force has with IonQ. This deal comes after the government had allocated $968 million for the R&D of quantum information systems (QIS) for the FY 2024 under the National Quantum Initiative (NQI) act. In other words, the deal was the result of money already being allocated and must be spent on quantum R&D projects rather than any true economic need for the product. In contrast, the revenues from all other commercial customers have largely remained stagnant, thus further supporting the hypothesis that the quantum computers that IonQ produces currently have no economic benefit outside of R&D. Besides that, the $54 million deal with the Air Force is set to last 4 years, which equates to an additional $16 million per year. However, this is insignificant in the face of a $150 million operating loss that the company reported in the last 12 months as a result of increased operating expenses. In addition to the usual R&D research costs, IonQ must also spend money on hiring and training PhD quantum experts to be sent to assist customers like UoM and the US government in using IonQ products. This is clearly an unsustainable business model which will result in equity raises which will dilute the company's shares. It is thus questionable that IonQ will be able to generate any value for its shareholders in the long term, if quantum computing will ever be viable at all.

Food_And_Work

it's a good call but i think backtesting defs needs some disclaimers. I view backtesting as the same way i view leverage, if you're smart about it and use it properly, it can really improve things, if you're not... well you blow things up. As someone who works in exotic derrivs/structured product sales, back testing is the worlds best way to dupe people (or yourself) into believing in a strategy. ultimately before you backtest you need to remember: 1. Just because it worked, doesn't mean it will work (*markets are constantly changing, no two situations are the same)* 2. Hindsight is 20/20 don't let it skew your strategy(*don't change your strategy to fit the historic data ["overfitting"]*) 3. kind of related to 2, but if you're going to adjust your strategy, apply logic to why you're doing it and the rationale, and make sure your decision isn't informed based on all of your sample data. (i.e. test for a 5 year period in 2005-2010, make your changes, and then test both variations in 2010-2015.) this rant is in no way pointed at you - i just felt like i needed to get it off my chest haha. I get pitched a new QIS strategy from a bank every week, and without failure they always have a page with a graph with a 45degree line going up and right over 20 years, then in size 6 font you see: >"*performance prior to 2024 is simulated, past performance is not a reliable indicator of future results.*" Without failure if you go through these strategies you can see the backtested performance is sitting at like 7% p.a. with a sharpe of 3.0 and the live performance is at 1.2% p.a. with a sharpe of 0.8 or something like that. The thing is, no matter what people say - no two years in markets are the same.

TooterMcPooterr

What is QIS? How do I Yolo into it?

Osoluchador

The reason why this market "feels off" or "weird" is due to dynamics that what has been that extremely atypical dynamic with dealers over the past couple years, where due to the persistent “crash-up” fear from the buyside (which didn’t have the positioning-on during the tightening cycle), we are now actually seeing dealers net short gamma in ppside strikes as this melt-up to new ATH gets increasingly nervous… while perversely, long gamma below spot from put sellers who are increasingly brave in-light of this SOGU (Stocks Only Go Up) market, because buying downside gamma has been equivalent to lighting money on fire into a market which can barely muster a -1% sell-off, let alone "crash-down” These dynamics, along with still not yet extreme net exposure / long positioning in historical context, as well as the never-ending vol supply from VRP / overwrite / dispersion books / QIS / premium income ETF - spaces collectively has been part of the positive spot / vol correlation which has seen vol up on days where the market rallies (as calls have been grabbed into and market chased higher), and vol down on spot lower days (as puts are bombed relentlessly with absurdly smooth sharpes of systematic selling in downside. Yesterday was another example of spot up, vol up in SPX and NDX but we actually saw skew steepen on the rally across SPX and NDX surfaces, which is now being somewhat reflected by a pocket of dealer short gamma (to downside hedgers) between 4800-4900 joining the net short gamma in upside strikes 5000-5100 and some into full-blown crash-up call wing 5200-5300, both acting as potential acceleration levels at different ends of spot. While generally long gamma just below ATM, which currently insulates against selloff between 4900-5000

Osoluchador

We're actually seeing a bit more nuance to options dealer positioning, dynamics that what has been that extremely atypical dynamic with dealers over the past couple years, where due to the persistent “crash-up” fear from the buyside (which didn’t have the positioning-on during the tightening cycle), we are now actually seeing dealers net short gamma in ppside strikes as this melt-up to new ATH gets increasingly nervous… while perversely, long gamma below spot from put sellers who are increasingly brave in-light of this SOGU (Stocks Only Go Up) market, because buying downside gamma has been equivalent to lighting money on fire into a market which can barely muster a -1% sell-off, let alone "crash-down” These dynamics, along with still not yet extreme net exposure / long positioning in historical context, as well as the never-ending vol supply from VRP / overwrite / dispersion books / QIS / premium income ETF - spaces collectively has been part of the positive spot / vol correlation which has seen vol up on days where the market rallies (as calls have been grabbed into and market chased higher), and vol down on spot lower days (as puts are bombed relentlessly with absurdly smooth sharpes of systematic selling in downside. Yesterday was another example of spot up, vol up in SPX and NDX but we actually saw skew steepen on the rally across SPX and NDX surfaces, which is now being somewhat reflected by a pocket of dealer short gamma (to downside hedgers) between 4800-4900 joining the net short gamma in upside strikes 5000-5100 and some into full-blown crash-up call wing 5200-5300, both acting as potential acceleration levels at different ends of spot. While generally long gamma just below ATM, which currently insulates against selloff between 4900-5000. However, VIX is where there is actual hedging being done (due to its inherent convexity). This Feb 14th VIX-peration is a potential binary tie-breaker for markets from here, because so much of the current VIX options gamma outstanding is concentrated in this expiration, with 58% set to roll-off. Either implied Vol squeezes of the back of whatever catalyst, and dealers who are short massive upside calls to customers, are forced to buy more vega / vol of vol / SPX skew to stay hedged the higher it goes, which risks a downside momentum move in spot equities / vol ripping. Or, conversely, the magnitude of the VIX call options set to expire Feb 14th do NOT realize, as markets / earnings / data remains orderly with vil remaining well supplied, and as VIX calls violently then decay hard, there is potential for substantial vega / vol of vol / skew then coming for SALE back into the market, which risks propelling us to new highs into / around expiration. Ironically, then, it’s possible that the latter scenario of "no Vol squeeze” into Feb 14th VIXperation = local spot equities highs (made via this UX1 / vol of vol / skew –dealer hedge unwind) could then create a situation where AFTER expiration, you have a setup to finally pull back in spot index, especially as shown in the SPX dealer gamma profile earlier, as we see ~85% of that front-month gamma rolling-off and expanding the price-path distribution. The one pushback in my mind is the timing of the NVDA earnings release coming after market on 2/21/24, where everybody knows top line is accelerating in this market supernova, that rev guidance is conservative enough to see another upside surprise, and that nobody cares about "VaLuAtIoN" lol. Yet that said, we have seen a few moments sell the news of late, and especially if this name and broad index were to melt-up into expiration the week prior, it very well could see a modest profit-taking snowball into something larger, particularly with the aforementioned beaucoup gamma coming-off after opex. IF—huge IF—you could then see NVDA and “Mag-whatever” megacap quality actually lead LOWER, there’s a second-order impact here which could feed an equities de-risking / and index vol squeeze, as the perpetual dispersion flow contributing to low Index vol as a funder, but also then too, contributing to S&P pairwise Correlation which continues its cratering…as index vol crunching lower allows for more L/S leverage, which feeds “Short Corr” –Dispersion theme. But if the Mag7 errr Mag4 errr NVDA were to hiccup lower even just on profit-taking spilling-over into something sloppier to the downside, there is that risk then not just due to underperformance from crowded megacap quality secular growth longs then going wrong-way, but then too likelihood of index vol squeezing as well, due to the most important thematic stock in the market going lower, which could then force de-grossing of not just Longs but of SHORTS. There’s a reason that Long-Term momentum factor is +12.2% YTD already as a market-neutral strategy because folks are grossed-UP into the Mo Longs (+3.2% YTD) which just keep working, but especially because Mo Shorts just keep going lower (-8.0%), so IF off the back of even just an NVDA profit-take that “Shorts” were to begin to violently outperforming and forcing more unwind, this could then becomes a larger de-risking issue due to historically high gross leverage. Just something to think about

Osoluchador

We're actually seeing a bit more nuance to options dealer positioning, dynamics that what has been that extremely atypical dynamic with dealers over the past couple years, where due to the persistent “crash-up” fear from the buyside (which didn’t have the positioning-on during the tightening cycle), we are now actually seeing dealers net short gamma in ppside strikes as this melt-up to new ATH gets increasingly nervous… while perversely, long gamma below spot from put sellers who are increasingly brave in-light of this SOGU (Stocks Only Go Up) market, because buying downside gamma has been equivalent to lighting money on fire into a market which can barely muster a -1% sell-off, let alone "crash-down” These dynamics, along with still not yet extreme net exposure / long positioning in historical context, as well as the never-ending vol supply from VRP / overwrite / dispersion books / QIS / premium income ETF - spaces collectively has been part of the positive spot / vol correlation which has seen vol up on days where the market rallies (as calls have been grabbed into and market chased higher), and vol down on spot lower days (as puts are bombed relentlessly with absurdly smooth sharpes of systematic selling in downside. Yesterday was another example of spot up, vol up in SPX and NDX but we actually saw skew steepen on the rally across SPX and NDX surfaces, which is now being somewhat reflected by a pocket of dealer short gamma (to downside hedgers) between 4800-4900 joining the net short gamma in upside strikes 5000-5100 and some into full-blown crash-up call wing 5200-5300, both acting as potential acceleration levels at different ends of spot. While generally long gamma just below ATM, which currently insulates against selloff between 4900-5000. However, VIX is where there is actual hedging being done (due to its inherent convexity). This Feb 14th VIX-peration is a potential binary tie-breaker for markets from here, because so much of the current VIX options gamma outstanding is concentrated in this expiration, with 58% set to roll-off. Either implied Vol squeezes of the back of whatever catalyst, and dealers who are short massive upside calls to customers, are forced to buy more vega / vol of vol / SPX skew to stay hedged the higher it goes, which risks a downside momentum move in spot equities / vol ripping. Or, conversely, the magnitude of the VIX call options set to expire Feb 14th do NOT realize, as markets / earnings / data remains orderly with vil remaining well supplied, and as VIX calls violently then decay hard, there is potential for substantial vega / vol of vol / skew then coming for SALE back into the market, which risks propelling us to new highs into / around expiration. Ironically, then, it’s possible that the latter scenario of "no Vol squeeze” into Feb 14th VIXperation = local spot equities highs (made via this UX1 / vol of vol / skew –dealer hedge unwind) could then create a situation where AFTER expiration, you have a setup to finally pull back in spot index, especially as shown in the SPX dealer gamma profile earlier, as we see ~85% of that front-month gamma rolling-off and expanding the price-path distribution. The one pushback in my mind is the timing of the NVDA earnings release coming after market on 2/21/24, where everybody knows top line is accelerating in this market supernova, that rev guidance is conservative enough to see another upside surprise, and that nobody cares about "VaLuAtIoN" lol. Yet that said, we have seen a few moments sell the news of late, and especially if this name and broad index were to melt-up into expiration the week prior, it very well could see a modest profit-taking snowball into something larger, particularly with the aforementioned beaucoup gamma coming-off after opex. IF—huge IF—you could then see NVDA and “Mag-whatever” megacap quality actually lead LOWER, there’s a second-order impact here which could feed an equities de-risking / and index vol squeeze, as the perpetual dispersion flow contributing to low Index vol as a funder, but also then too, contributing to S&P pairwise Correlation which continues its cratering…as index vol crunching lower allows for more L/S leverage, which feeds “Short Corr” –Dispersion theme. But if the Mag7 errr Mag4 errr NVDA were to hiccup lower even just on profit-taking spilling-over into something sloppier to the downside, there is that risk then not just due to underperformance from crowded megacap quality secular growth longs then going wrong-way, but then too likelihood of index vol squeezing as well, due to the most important thematic. Stock in the market going lower, which could then force de-grossing of not just Longs but of SHORTS. There’s a reason that Long-Term momentum factor is +12.2% YTD already as a market-neutral strategy because folks are grossed-UP into the Mo Longs (+3.2% YTD) which just keep working, but especially because Mo Shorts just keep going lower (-8.0%), so IF off the back of even just an NVDA profit-take that “Shorts” were to begin to violently outperforming and forcing more unwind, this could then becomes a larger de-risking issue due to historically high gross leverage. Just something to think about

ithinkwegotelves

>I am 26 now, how do I know that in year 2054. when I want to take money out, the money will actually grow at advertised 6-8% (when adjusted for inflation) every year since 2023? 1. You don't. 2. Don't just buy VT or a target date fund and chill. That's the advice you'll get the most. 3. Diversify. I mean truly diversify. Stocks, bonds, commodities, fx, sector rotation, trend following, QIS. Find a fund that has a diversification strategy and rebalances around that.

ExogenousDong

I'd take a look at some of the ETFs from Simplify Asset Management. A lot of their strategies are seeded by institutional investors like pension funds and large endowments and are institutional quality. Some interesting tickers are: SVOL QIS EQLS CTA

notapersonaltrainer

Another bucket of alternatives is to think in terms of strategies rather than asset classes. Managed futures was already mentioned which follow large trend changes. There are also new funds like HFND QIS that replicate a basket of strategies at much lower fees than subscribing to hedge funds. Long/short funds like EQLS hedge out market beta and bet on relative moves between stocks. IVOL has a vol overlay on top of TIPS that give some convexity if there is panic in the rate markets.