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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Win-Lose-Draw who wrote (43467)	10/14/2005 2:10:08 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

The discount should be expected, unless (possibly) $VIX is pegged at historical lows. The discount reflects the fact that $VIX overstates real volatility in the near-term. I do not understand this statement. You are telling me it should converge then you seem to be telling him a discount should be expected. Finally, you say that "$VIX overstates real volatility in the near-term" which makes no since as a general basis since the VIX is looking 30 days ahead at all times. Looking ahead 30 days would mean that it might overstate or understate real volatility as it is currently happening (at least to me). So once again I am confused. ...it did not converge on tuesday or wed - ended up at a discount of 5 or 6 pts!! 5 or 6 points sounds significant. What are we callling a point here? Can we see the $VIX at time of expiry and the Price of the Future at expiry. Thanks Mish