Tuesday October 27, 05:51 PM
STOCKS NEWS US-Volatility index rises for third day
Stocks on the move
Real (Frankfurt: BJU.F - news) -time Equity news
U.S. stock market report
1318 ET 27Oct2009 Fear gauge rises for third straight day
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The CBOE Volatility Index rose 2.26 percent to 24.86 for the third
straight session. The move follows a 9 percent leap in the reading of Wall
Street's fear gauge on Monday--a trading day when investors were left
flat-footed as stocks flashed from green to red. 'It was highly reminiscent of
the trading pattern in 2008 and earlier this year when, try as they might,
investors couldn't shake off the recession blues no matter how economists tried
to spin data points,' said Andrew Wilkinson, senior market analyst at
Interactive Brokers Group.
It was also less than a week ago, the VIX, a 30-day risk forecast priced
off of S&P 500 options, tested the 20 level. Wilkinson noted one investor
appears to be looking for a return to volatile sessions and sold December 25
VIX puts to back a bet the VIX will return to a mid-30 reading by the end of
2009. Some 24,000 VIX calls at the Dec 35 strike were bought for 79 cents,
partially funded by the sale of almost 7,500 puts expiring at the same time for
$1.90, he said.
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