Volatility Has Spiked, Will It Continue?

Posted On August 6, 2019 2:13 pm
By: Steve Smith

The trade war-induced sell-off has caused market volatility, as measured by the Chicago Board of Options Exchange (CBOE) Volatility Index to surge by over 70% in the past two days to 24, a year-to-date high.

What sometimes gets lost in the broad discussion of VIX is the specifics of how does implied volatility get factored into individual option prices and impacts position profitability? The term volatility gets thrown around a lot and is often used interchangeably for big moves, especially down, or perceived risk.

But for… Continue reading at StockNews.com

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.