How about that Vix

R

Roman Candle

I gave up looking at that after that last 2003-2007 bull market. Every Monday it would open up 5.00% as the market churned higher. Down days were in some case up for the Vix, and big up days were slightly down, just like today.

I encourage any new traders to discard looking at the Vix it will leave your very frustrated.


Price action is all that matters.
 
Quote from Roman Candle:

I gave up looking at that after that last 2003-2007 bull market. Every Monday it would open up 5.00% as the market churned higher. Down days were in some case up for the Vix, and big up days were slightly down, just like today.

I encourage any new traders to discard looking at the Vix it will leave your very frustrated.


Price action is all that matters.
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Well said...I found many indicators twice as potent -- and none of them are very good too!
 
This rally is breathtaking. I can't believe any of it, but that doesn't stop me from buying into AUD/JPY. Just gotta keep tight stops and let it run like the wild horse it is.
 
Quote from Ivanovich:

This rally is breathtaking. I can't believe any of it, but that doesn't stop me from buying into AUD/JPY. Just gotta keep tight stops and let it run like the wild horse it is.
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You are basically saying the carry trade is correlated with equity beta. I got out of GC because I got tired of the breaking correlations.
 
going with the flow is great .. until the waterfall at then end fo the river drops you off the cliff.. waterfall AHEAD!! BEWARE UP HERE.. the air is thin!!
 
One way to look at the VIX is reflective of the demand for put options. As portfolio managers become more fearful of future market declines, they reduce their market exposure by buying S&P 500 put options. This increases the demand for these options which increases their prices. Since all the inputs into the option pricing model other than volatility are relatively fixed and known, the increased prices translate into increases in implied volatility of these options and therefore a jump in the VIX (the VIX is based on the prices of a basket of S&P 500 options). Hence, an increase in the VIX may reflect an increase in put demand which reflects an increase in fear about market declines.
 
Quote from Roman Candle:

One way to look at the VIX is reflective of the demand for put options. As portfolio managers become more fearful of future market declines, they reduce their market exposure by buying S&P 500 put options. This increases the demand for these options which increases their prices. Since all the inputs into the option pricing model other than volatility are relatively fixed and known, the increased prices translate into increases in implied volatility of these options and therefore a jump in the VIX (the VIX is based on the prices of a basket of S&P 500 options). Hence, an increase in the VIX may reflect an increase in put demand which reflects an increase in fear about market declines.
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Or you could simply read the quote by Bill Sjostrom that this moron pasted w/o attribution:

Under comments: http://www.theconglomerate.org/2008/10/the-vix-is-not.html
 
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