When you have options, volatility is your friend
The jumpier prices are, the more valuable is a right to buy or sell
IMAGINE THAT, by some twist of fate, you become the ruler of an oil-rich state. A crash in the oil price has left a hole in its budget. You are forced to consider selling the kingdom’s assets. Among them is a mothballed oilfield in a remote part of the country—so remote that it costs $90 to retrieve each barrel of oil. That is above the prevailing price of $70 a barrel. Even so, you are advised to try to sell a licence to operate the field.
This article appeared in the Finance & economics section of the print edition under the headline “The rub of the VIX”
Finance & economics May 11th 2019
- America ratchets up the pressure in its trade war with China
- So far, Donald Trump’s trade war has not derailed the global economy
- The EU tries to strong-arm Switzerland into a new trade deal
- Months after IL&FS collapsed, India’s markets are on a strong run
- Mobile money comes to Nigeria
- New research traces the intricate links between policy and politics
- When you have options, volatility is your friend
- The state of America’s community banks
From the May 11th 2019 edition
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Germany’s economy goes from bad to worse
Things may look brighter next year, but the relief will be short-lived
An economics Nobel for work on why nations succeed and fail
Daron Acemoglu, Simon Johnson and James Robinson tackled the most important question of all
Why investors should still avoid Chinese stocks
The debate about “uninvestibility” obscures something important
China’s property crisis claims more victims: companies
Unsold homes are contributing to a balance-sheet recession
Europe’s green trade restrictions are infuriating poor countries
Only the poorest can expect help to cushion the blow
How America learned to love tariffs
Protectionism hasn’t been this respectable for decades