English speakers have grown to love the German word schadenfreude. But what’s the single word for indifference to the suffering of others? We need to figure this out to describe what’s happening in the US options markets. For the past decade, European and US options investors have been sympathetic to each other’s pains. When we […]
Reid Steadman is vice president of non-equity indices at S&P Dow Jones Indices. Reid is responsible for the product management of S&P Dow Jones Indices’ fixed income and commodity index families, the custom index business, and volatility indices.
Prior to his current position, Reid was head of ETF licensing and, before that, a member of S&P Dow Jones Indices’ marketing team. Before joining Standard & Poor’s in 2003, Reid worked as an economist for the United States Bureau of Labor Statistics.
Reid holds a B.A. in economics from Brigham Young University. He also holds an MBA from Carnegie Mellon University, with emphases in finance and marketing.
Author Archives: Reid Steadman
What is the essence of VIX? This may seem like an abstract, philosophical question, but I can assure you it is not. It is a practical one, and if you can understand what makes VIX unique, you will know why this index matters so much. Informed investors know that VIX: Employs a wide range of options […]
As oil prices have fallen, many investors with exposure to energy companies have wisely kept an eye on VIX. But there is another volatility benchmark – one more suited to energy equity investments – which investors should also watch carefully: VXXLE. VXXLE is the ticker for the CBOE Energy Sector ETF Volatility Index. This index has same […]
Franklin Delano Roosevelt would be disappointed. The US fear index, officially named the CBOE Volatility Index (VIX), has ticked up, averaging 16.4 since the beginning of Q4 2014, compared to 13.5 in the first three quarters of last year. If the story stopped there, we might still be able to look FDR in the eye. […]
I have a neighbor who is cooler than me. He is braver than me. He also has more expansive and expensive medical and auto insurance than I do. How do I know all this? Well, he races street motorcycles. The other day I asked him what was the fastest he had ever gone. His answer: […]
In the article at this link, Bill Luby – VIX analyst extraordinaire – dispels a misconception I have heard repeated at conferences and in presentations. Very often, people refer to VIX as “mean reverting.” This is not correct in the strictest sense of that phrase. VIX is not inclined to return to its long-term average. […]
Your portfolio is like a hockey team. You don’t think so? It is. And VIX plays a key role. Stay with me while I explain. Equities are your guys playing at center and on the wings. You expect production from them. Your team largely lives and dies by how consistently they score. Bonds are your […]
Someone asked me this last week: “What’s a normal or typical VIX level?” That’s a good question. Here is the answer: 20.2. And 17.1. And also 13.0. Before I go into why it takes at least three numbers to answer this question, let me remind you that the history of the CBOE Volatility Index (VIX) […]
At work, I am sometimes asked this simple but challenging question: “Where does VIX come from?” There is a reason I am asked this – I am our company’s product manager for volatility indices. But I admit that I have struggled to come up with an approachable way to explain the methodology of the CBOE […]
Most people think of VIX as simply an index. This makes sense — the “I” in VIX stands for that very word. But VIX is more useful than your average index. It could easily be grouped with economic indicators, like the unemployment percentage or new home sales. Why? Because the VIX level — not just […]