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The VIX Drops Again Signaling A No Fear Market



March 24, 2011 – Comments (2)

The Market Volatility Index(VIX) has declined by 13.00 points since making its recent high on March 16, 2011 at $31.28. When the VIX declines it is a sign that the market volatility has declined. Many investors and traders will use the VIX as a fear gauge for the stock markets. Often traders will add risk when the VIX declines as there is very little fear. Smart and savvy traders may want to buy VIX contracts as protection when the VIX declines so sharp and so suddenly. When the VIX declines the major stock indexes will usually trade higher. The opposite is true when the VIX jumps or trades higher the major stock indexes will decline. The all time high for the VIX was in October 2008 when the VIX traded at $89.53. 

Nicholas Santiago

2 Comments – Post Your Own

#1) On March 24, 2011 at 6:57 PM, guiron (39.06) wrote:

This player has no picks, has posted a poorly written, paper thin article with less information than you could find anywhere else on the web, and has oh-so-helpfully included a link to another website at the bottom of the post. Oddly enough, the username is also the name of another commercial website- imagine that! I'm not sure what value this post is to the rest of CAPS, but I can take a guess that it's valueable to the poster, who is basically spamming CAPS and trying to drive traffic to their website.

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#2) On March 24, 2011 at 9:33 PM, BillyTG (29.43) wrote:

I've traded the VIX a couple times, and have a limit buy order in now, while it's low again.  I agree with the poster. It's a great way to hedge this bull market.  While it's a volatility index, it's more accurately an index of puts, which means it basically goes up when the market is down (and people turn bearish, buying puts) and goes down when the market goes up (when people get rid of their puts as they become bullish again).


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