Russ Chrusciel
product manager
SunGard’s Brass business
Over the past twelve months, the broader markets have experienced wild swings in price and volatility. On the options side, the Chicago Board Options Exchange Volatility Index, more commonly known as the VIX, has really captured these shifts in investor sentiment. Often referred to as the “fear index” for the way it measures the market’s expectation of volatility in upcoming months, the VIX has significantly moved DOWN in 2009.
On October 24, 2008, the VIX registered an intraday high of 89.53 - likely due to uncertainty U.S. banking system at that point in time. However, almost a year later in early October 2009, the VIX has settled into a fairly tight range, with values now at 25.00. In short, this is a dramatic shift in expectations - with the VIX down over 70% from its 12 month highs.
If you’re engaged in the markets, does this much lower VIX mean that the markets expect a “calmer” environment in the months ahead? Is the U.S. economy becoming more stable as 2009 comes to a close? Or are we just going back into another period of economic unknowns?
No one has a financial “crystal ball” to predict the future…but I believe most traders and risk managers recognize they need appropriate tools and products to effectively deal with market swings and financial uncertainty. SunGard has the trading and risk management solutions to ensure that your business thrives - no matter how the broader markets are behaving. If you’re involved in the markets from the buy-side, from the sell-side, or from another related area - SunGard wants to be your trusted partner and help empower you to manage your trading risks appropriately.
We invite you to attend our Chicago City Day on Monday, October 19th and share your thoughts about where the financial markets are headed: http://www.sungard.com/campaigns/fs/fsevents/citydays/locations/chicago.aspx