HerrKaiser schreef:
VIX Poised for Lowest Close Since September 2008 as Stocks Gain
By Jeff Kearns
Sept. 16 (Bloomberg) -- The benchmark index for U.S. stock options approached its lowest close in more than a year as global equities rallied on signs the recession is over.
The VIX, as the Chicago Board Options Exchange Volatility Index is known, fell for a third day, slipping 1.4 percent to 23.09 at 12:42 p.m. in New York. The index measures the cost of using options as insurance against declines in the Standard & Poor’s 500 Index, which advanced 1.1 percent. Benchmark gauges in Europe and Asia also climbed.
“The S&P keeps slowly inching its way up and that’s an environment that crushes volatility,” Dominic Salvino, a specialist at Group One Trading, the primary market maker for VIX options, said in an interview from the CBOE floor. “It’s amazing to me because 20 is the long-term average and we’re almost back there. That’s hard to believe.”
The VIX has averaged 20.24 over its 19-year history. It decreased 43 percent this year after surging to an intraday record of 89.53 in October as stocks plunged. The index’s 52- week closing low is 23.09 on July 24. It last closed below that level on Sept. 8, 2008, finishing at 22.64.
Stocks rose following faster-than-estimated growth in retail sales and billionaire investor Warren Buffett’s statement that his company is buying equities. Confidence in the world economy held at a record high in September after reports suggested the recession is over and officials said they won’t rush to withdraw stimulus, a Bloomberg survey of users on six continents showed.
Options are derivatives that give the right to buy or sell a security at a set price and date. Investors use options to guard against fluctuations in the price of securities they own, speculate on share-price moves or bet that volatility, or stock swings, will increase or decrease.
To contact the reporter on this story: Jeff Kearns in New York at
jkearns3@bloomberg.net.
Last Updated: September 16, 2009 12:47 EDT