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Daily Traders Edge

The creator of Wall Street’s ‘fear gauge’ says people don’t understand it as well as they should

September 11
14:07 2017

One of Wall Street’s most popular positions is betting that nothing will happen in the markets.

Every day, traders across the US place bets that volatility will continue to decrease as stocks continue to climb higher and higher. And for the most part, they’ve profited from those bets.

Since the CBOE’s volatility index, or VIX, otherwise known as Wall Street’s fear gauge, was launched in January 1993, more than 30 trading products have been created to let investors bet on its levels. And since the financial crisis in 2008 — when it reached an intraday record high of 89 — those levels have only gone down.

This summer, the VIX reached a historic low of 9. Today, it’s hovering at about 12.

Continue Reading at Yahoo Finance

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