Open Daily: 10am - 10pm | Alley door pickup 10am - 7pm 3038 Hennepin Ave Minneapolis, MN
612-822-4611

  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
Tail Risk Hedging (Master Option Trader Series): Portfolio Protection Without Killing Returns

Tail Risk Hedging (Master Option Trader Series): Portfolio Protection Without Killing Returns

Pelz, Tony

Paperback

Series: Eng Master Option Trader, Book 7

Investing & Finance

ISBN13: 9798196156335
Publisher: Independently Published
Published: May 8 2026
Pages: 142
Weight: 0.44
Height: 0.30 Width: 6.00 Depth: 9.00
Language: English
Tail risk is the event that lives outside the model. Not the two-sigma drawdown that options pricing already discounts, the six-sigma dislocation that arrives with no warning, prices nothing like it should, and clears out traders who had everything right except one thing: they were not positioned for the world to briefly stop working. Every sophisticated options trader eventually discovers that knowing the Greeks and running a correct portfolio framework is not the same as surviving a regime break. This book teaches you how to do both.

You will learn:

  • How to define and measure tail risk in an options book: the precise difference between normal volatility risk and true discontinuous event risk, and why your existing stress tests are probably not finding it
  • How to build systematic Put protection without bleeding premium into a hedge that never pays: spread structures, roll schedules, and the cost-management disciplines that make a long-term hedging programme survivable
  • How VIX Call overlays and variance swaps function as tail hedges, when each is appropriate, and what they actually cost you across the long stretches when nothing breaks
  • How to construct convex payoff profiles that pay exponentially in a crisis without requiring you to predict timing, magnitude, or catalyst
  • How to identify positions in your book that appear uncorrelated and become violently correlated the moment VIX spikes and how to hedge the correlation itself before it becomes a problem
  • How to size and maintain tail hedges across three distinct market regimes: low-volatility grind, moderate stress, and full dislocation including when to add, when to roll, and when to take the hedge off entirely
  • How to run two complete tail-event scenarios, a slow-burn institutional deleveraging and a single-session crash, from initial trigger through active portfolio management and post-event reconstruction

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