Steve Sosnick, Interactive Brokers’ chief strategist, discusses his current thoughts on the CBOE VIX index and overall stock market volatility.
He warns traders against shorting the volatility index in most cases given the risk-reward trade-offs.
When volatility spikes, it’s usually a sign that investors are panicking. Yet right now, while we are seeing some retrenchment in the market, we are only about 4% from record highs, Sosnick points out.
So there’s not a lot of fear in the market. To learn more, check out this video.
Photo Credit: Benjamin Balazs via Flickr Creative Commons