I was not questioning if you knew what vol was..I misunderstood possibly that u inferred low vols were saying the market is a buy...of which it may or may not be. Trust me I don't analyze too deeply here...just as a vol trader sometimes I do get interested in how others interpret vol levels. Also please note, one can trade vols better than most for years and still have an absurb moment, lol.
Its been so so long traders can hardly remember fear
- Thread starter hafez50
- Start date
I was not questioning if you knew what vol was..I misunderstood possibly that u inferred low vols were saying the market is a buy...of which it may or may not be. Trust me I don't analyze too deeply here...just as a vol trader sometimes I do get interested in how others interpret vol levels. Also please note, one can trade vols better than most for years and still have an absurb moment, lol.
OK, let me rephrase what I said. Since "I" view vol as an output vs input and I analyze the market through it's input variables and not it's output variables, I don't make predictions on the market based on a "VIX" reading. I was not trying to define vol but rather vol's role in my analysis. I was not trying to explain what the VIX was to you. LOL.
I never understood the belief that a low vix or high vix had any predictive qualities. A simple correlation regression from 2002 to the present would immediately refute such a belief. I think traders far too often get lazy and fall back on the "it's too high" or "it's too low" analysis to make trading decisions. The same people who are getting killed shorting TSLA right now. While it is true eventually anything at an extreme has to revert, it only reverts at one data point and has 100's of data points where it does NOT revert. Logic would tell these people that obviously there is no correlation between extreme readings in the VIX and the market. And to make it even more complicated is no two people will ever agree on what constitutes an extreme reading. BTW, this was not all addressed to you, just speaking to the broad populace that believes these things.
