Even the Volatility Index Is Volatile

You know volatility is out of control when the index that measures volatility is itself setting new records for volatility.

In the second week of August, U.S. equity markets witnessed four consecutive days of 400-point swings, the first time that has happened in the stock exchange’s 115 year history.

Given that volatility, it’s no surprise that the Chicago Board Options Exchange Volatility Index (VIX) had its largest quarterly increase ever in the third quarter of 2011.  The VIX has held above 30% for the past several months, its longest period above that level since the five-month period of October 2008 to March 2009. read more

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