Volatility is heating up. Triple-digit moves in the Dow Jones Industrial Average are now an almost everyday occurrence. The CBOE Volatility Index (VIX), popularly known as the stock market’s fear gauge, has been marching higher. The index, which uses options pricing to measure expected swings in the S&P 500, implies that investors expect more intense and frequent stock price swings in 2015. The fear gauge hovered around 14 much of last year, its lowest average since 2006. It jumped to around 20 in the first two weeks of 2015, hitting a one-month high above 22 on January… Read More
Volatility is heating up. Triple-digit moves in the Dow Jones Industrial Average are now an almost everyday occurrence. The CBOE Volatility Index (VIX), popularly known as the stock market’s fear gauge, has been marching higher. The index, which uses options pricing to measure expected swings in the S&P 500, implies that investors expect more intense and frequent stock price swings in 2015. The fear gauge hovered around 14 much of last year, its lowest average since 2006. It jumped to around 20 in the first two weeks of 2015, hitting a one-month high above 22 on January 15. The Market Has Shown More Volatility This Year Intraday swings — the difference between the highest and lowest levels during the trading day — are also greater. The S&P 500 saw swings of an average 29 points per day in January, or 1.4%, according to financial data firm FactSet. That puts 2015 on track for the widest swings in four years, since the index averaged swings 1.6% intraday in 2011. By comparison, the benchmark index in both 2013 and 2014 saw average intraday swings of about 0.9%. … Read More