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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: mishedlo who wrote (259205)9/6/2003 10:19:03 AM
From: James F. Hopkins  Read Replies (1) of 436258
 
Oh Brother...what this will mean we know not..however it will change
the way the vix works..for better or worse ..
So we will have futures on futures..supposedly to smooth out
the volitility..but I sort of doubt it.
-----
To make VIX tradable, the CBOE has had to tinker with it substantially.
Among other things, VIX was(note 1) calculated from Standard & Poor's 100
Index option prices. The new VIX instead will be based on prices of the
more liquid S&P 500 options.

The old VIX also is calibrated from a small group of just eight short-term
options. The new VIX will incorporate prices of many more options. This
broader range likely will produce a more representative sample of
investor sentiment.
it may smooth out the vix some, but I don't see how it will help
the overall market, unless draining liquidity can be a help.
Is it a way of fighting the FED ?

( Note 1 was )
Did they already make a change..it sure was odd how the vix droped
yesterday with the market falling ?

Jim
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