The Weekly News Roundup is your weekly recap of CBOE features, options industry news and VIX Index and volatility-related articles from print, broadcast, online and social media outlets.
A Historical View of Histograms
In recent weeks, investor interest in strategies that protect portfolios from large losses has begun to rise. One of the strategies that can be used to manage downside risk, is the iron butterfly strategy, which is benchmarked by the CBOE S&P 500 Iron Butterfly Index (BFLY), which uses S&P 500® (SPX) calls and puts. As seen in the histogram, in the 367 months since mid-1986, the S&P 500 Index had 26 monthly declines of worse than 6% losses, while the BFLY Index had only two such declines. CBOE has provided thousands of investors with numerous histograms on benchmark indexes that use options on the SPX, Russell 2000® (RUT) or CBOE Volatility Index® (VIX®).
For more information see, CBOE Histograms.
VIX Fix: Volatility in the Market – Real or Fake News?
As investors prepare for a long weekend to celebrate the Presidents’ Day holiday, the Trump Rally is managing to maintain its momentum. The Dow Jones Index saw six consecutive days of all-new record highs, topping out at 20,619 on Thursday. Investors are making a case for the continuation of the Trump Rally as positive corporate earnings are reported, a low interest rate environment and friendlier business policy agenda potentially looms in the future. Meanwhile, the CBOE Volatility Index (VIX) made its biggest post-election two-day spike this week before losing steam Friday, landing back in the 11-range once again. While some market participants continue to forecast the return of volatility in the near future, others dismiss these reports as another example of “fake news.”
“What VIX is Really Telling Markets” – James Mackintosh, The Wall Street Journal
“Volatility Traders Shed VIX Positions as Markets Are Eerily Calm” – Carolina Wilson, Bloomberg
“Washington’s Chaos is Far From Wall Street” – Steven Russolillo, The Wall Street Journal
“Wall Street’s ‘Fear Index’ is on Track for the Biggest Two-Day Jump Since Trump’s Election” – Mark Decambre, Market Watch
“Stock Investors’ Breathtaking Complacency” – Christopher Langner, Bloomberg
“CBOE VIX Hovers Near Two-Year Low as U.S. Stocks Extend Rally” – Sam Bourgi, Economic Calendar
“The VIX Risk Worth Keeping on Your Radar” – Todd Salamone, Schaeffer’s Investment Research
“The Volatility Limbo: How Low Can VIX Go?” - Peter Tchir, Forbes
“Opinion: The Stock Market May Be “Overbought’ but There Are No Sell Signals Yet” – Lawrence G. McMillan, Market Watch