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Calm before the storm?

The #vix index, that represents the implied volatility extracted from options on the S&P500 index, is trading at 13.7, and has been trading below 19, consecutively, for the last 3 months. This apparent calm, where investors pile on option selling to collect the premiums, sometimes precede big movements to the upside. We don’t need to see the index at 80, like we did during the pandemic, to feel some pain the market. A 40-handle might be enough for the fed to change Its narrative, and for investors to change their mantra from #greed to #fear. This week, the #fomc meets to publish the decision on official interest rates, and the market expects rates to remain the same; no change. At the same time, while oil prices are going up, this week inventories in the US will be published, and are threatening the proverbial calm in the stability of the consumer basket prices.


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