This Week in VXST – 8/8/2014

The combination of the S&P 500 not following through on the downside after the previous week’s slide and no significant economic event on the horizon for the near term resulted in a pretty big drop in VXST this past week. The index came in from over 19 to the mid 15 level and finished the week at a slight discount to VIX.

VXST PA

I am the first person that admits when they do not know something and when I see flat volatility curves I really do not have a consistent explanation as to how they should be interpreted. Maybe if I’m uncertain what it means, that is how it is to be interpreted, the market is in a bit of flux wondering if the S&P 500 has another all-high in it, or is the long expected (by market pundits) correction finally beginning.

VXST

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Russell Rhoads, CFA

CBOE Options Institute

Russell Rhoads, CFA, is a Senior Instructor with the Options Institute at the Chicago Board Options Exchange. He joined the Institute in 2008 after a career as an investment analyst and trader with a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, TradeLink Securities and…

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