How Tail Hedges Become Liquidity When Portfolios Break
Tail hedging is often treated as a static insurance allocation – bought, monitored, and left alone until expiry.
That assumption breaks down precisely when markets do.
This CIO brief explains why most tail-risk programmes fail in practice: not because convexity doesn’t pay, but because it is not monetised in time to matter.
It shows how tail hedges decay once policy and liquidity return, why waiting for the “right moment” destroys value, and why authority, triggers, and use-of-proceeds discipline must be agreed before a crisis arrives.
The focus is not on trading or product selection, but on structure – how governance, market plumbing, and execution under stress determine whether convexity becomes liquidity, or theatre.
Read the CIO brief
When Convexity Matters Most