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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: trilobyte who wrote (47329)	5/28/2001 10:23:58 PM
From: StanX Long	Read Replies (1) \| Respond to of 70976

"The VIX hasn't closed below 23 since Sept. 28." I mentioned the VIX moving downward, from another thread. MAY 28, 2001 Summer Crush? A less volatile market presents its own rewards By Erin E. Arvedlund "When the stock market rallies as it has, investors stop worrying, and volatility recedes. Lately, volatility is not only down; it's getting crushed. A Fed-led rally, the end of earnings season, and the summer doldrums are all contributing to investors' collective sigh of relief. So, for the next few weeks, at least, watch out for a selloff. Why? Option sentiment readings, contrarian by nature, call for it. If most people who invest in options are complacent and expect the market to do nothing, they lower or cancel bids and aggressively sell options. Volatility declines often precede a short-term market top, the opposite of what the herd expects. The Nasdaq 100 Volatility Index, the QQV, is in the low 40s and nearing a 52-week low. The older, more traditional fear gauge, the Chicago Board Options Volatility Index, or VIX, remained fairly high -- at or above the 27 level -- until last week, when it fell to 22.94. The VIX hasn't closed below 23 since Sept. 28." "The summer historically dampens volatility as option investors and traders head for vacation. But even the pros are shocked by how fast volatility has dropped off this season. Already, "implied volatilities for stocks are at the lows of August 2000, the end of last year's vol crush," writes Leon Gross, head of the derivatives strategy team at Salomon Smith Barney, a unit of Citigroup." interactive.wsj.com Stan