Out-of-Whack Volatility Gives Strategists Hope of Calm Ahead
- Cantor, Credit Suisse think market distortions can’t last
- VIX and its options showing moves that may be hard to maintain
'Volatility Genie Is Out of the Bottle,' Says Harnett
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Volatility and options prices are so distorted that they’re likely unsustainable, offering hope to some strategists who predict the global stock selloff may resolve quickly.
For one thing, the surge in volatility for equities isn’t being mirrored in the bond market. While the Cboe Volatility Index has risen well off its historical floor, surpassing 50 on Tuesday, the Merrill Lynch Option Volatility Estimate Index, which measures volatility in one-month Treasury options, remains near long-term lows despite an uptick in recent days.