Tag Archives: education

The Essence of VIX: What You Really Need to Know

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 […]

A VIX for the Energy Sector

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 […]

VIX – The Enforcer

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 […]

What’s a Normal VIX Level?

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) […]

Where VIX Comes From

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 […]

Turn VIX into information you can use

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 […]

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