In this video I explain the Sharpe Ratio and why it's an important risk adjusted metric to help us gauge the long-term viability of an investment. When analyzing performance, the rate of return of an investment can be deceiving because it doesn't take into account the risk required to achieve it. To get the full picture we need to factor in the risk, which will give us more information on whether the rate of return is actually sustainable. The most basic and most common risk adjusted metric is called the Sharpe Ratio. Claim your FREE trial to the VTS Total Portfolio Solution: Follow me on Twitter: Chapters: 0:00 Introduction 1:10 Sharpe Ratio formula 2:17 What do Sharpe Ratio values mean? 3:35 Example using XIV vs S&P 500 4:47 Why does Sharpe Ratio matter? Brent Osachoff , volatility trading strategies, VTS , VTS options, volatility trading , Volatility ETPs, options trading , investing , stock market, VIX, VXX, UVXY