Portfolio Protection + Money Management for the Long Term Message Board

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Strategies & Market Trends : Portfolio Protection + Money Management for the Long Term

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To: BDR who wrote (39)	4/15/2000 11:49:00 AM
From: BDR	Read Replies (2) of 57

A question for the chartmeisters and tea leaf readers: can we take some comfort from the VIX which hit a high on Friday of around 40+ not seen since the 10/98 and 10/97 bottoms? From the Decision Point website (subscription): ABOUT THE VOLATILITY INDEX By Nicholas Proffitt The VIX is calculated by taking the weighted average of the Implied Volatility of 8 OEX calls and puts with an average time to expiration of 30 days. As such, it measures fear and optimism as manifested in OEX options activity. When large numbers of traders become fearful, the VIX reading rises, and when complacency about the market reigns, the VIX reading falls. And since the vast majority of put/call buyers are wrong and lose money, it's usually a smart move to fade (go counter to) what the VIX says the the crowd is doing.

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