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Strategies & Market Trends : Pump's daily trading recs, emphasis on short selling

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To: Saulamanca who wrote (6444)7/11/2002 6:36:25 AM
From: Walk Softly  Read Replies (3) of 6873
 
Thanks for that page, but here's mthe kicker (taken right from that page):

"One measure of the level of implied volatility in index options is CBOE's Volatility Index, known by its ticker symbol VIX. VIX, introduced by CBOE in 1993, measures the volatility of the U.S. equity market. It provides investors with up-to-the-minute market estimates of expected volatility by using real-time OEX index option bid/ask quotes."

So the CBOE back calculated the '87 data which makes it useless.....

I've traded options since the mid 80s (and wrote some of the first options analysis software commercially available).... there are huge differences in todays options markets as popularity and sophistication have increased.....

Needless to say the VIX data of 1987 has little bearing on recent VIX..... spreads are dramatically wider now than they were in the mid-80s and have made straddles almost impossible to profit from....

VIX approaching 40 is EXTREME, a reaction low/bottom is iminient....
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