Volatility in the Future
Posted on April 3rd, 2012
The VIX (implied volatility index) has become very steep.
The 7th contract (6 months out) is significantly higher than current implied volatility.
What does this mean?
It simply means that the market is pricing in risks of a correction later on in the year.
Will it happen? Nothing is for certain, and if you have a long term diversified strategy (which hopefully you do) then this may just be a bump in the road
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The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 large capitalization stocks with dividends reinvested.
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