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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe market's wild ride is telling us something really important
For days, since the stock market's brutal selloff on Friday and Monday followed by a Tuesday marked by wild swings, this has been the conversation going on in offices across global Wall Street:
Traders, who had been levered up to their eyeballs, are speaking to their risk managers. And their risk managers are explaining that, according to the new model that factors in a new economic reality, they'll have to borrow less money to play in the market.
Volatility, these killjoys will say, has returned. After laying dormant for months, the VIX, Wall Street's volatility index, has roared back to life.
"The VIX is now pricing the equivalent of a 2% S&P 500 move up / down each day for the next month," according to the Chief Investment Office at UBS Wealth Management. "The market-implied probability of another sell-off in excess of 5% over the next two weeks is about 25%."
In other words, even after the dust settles from the breathtaking selloff we just saw, well still be living in a riskier world.
https://www.msn.com/en-us/money/markets/the-markets-wild-ride-is-telling-us-something-really-important/ar-BBINPNp?li=BBnbfcN&ocid=edgsp
Winning baby! So much winning.
Bleacher Creature
(11,258 posts)Get ready to add the world's largest economy to that list.
brooklynite
(94,792 posts)RandomAccess
(5,210 posts)and finance, but I sure do appreciate good articles like this to explain some of it. Thanks.