Investors are under stress. And volatility dominates the markets. in Piazza Affari it's a new day on the roller coaster: after having lost up to 2% it is going back up and is now traveling up by 2,7%. Yesterday the Vix index, which measures short-term expectations on market volatility, jumped above 40 from 34 at the end of last week (as of today's Wall Street open it is down slightly by 0,41, 38,43% at 1993). The Volatility Index (Vix) was created by the Chicago Board Options Exchange in 500 and expresses the trend of the implied volatility of the options on the S&P2002 index. And it is inversely correlated with the performance of the stock markets: the more the stock market rises with regularity and serenity, the more the Vix will settle at low values. For example, in the phase of market expansion after 25, the Vix generally remained below XNUMX.
Conversely as jitters and sell-offs build, as stock markets plummet the Vix goes up. That is why it is commonly called the "fear index". And fear and uncertainty have held sway on the price lists in recent months. It is no coincidence that in the first ten days of August the Vix shot above the 45 level, on the levels of May 2010, while from the end of 2010 (and up to July) it moved substantially below the 20 level, except for a peak at the end of March of 30. To get an idea, it suffices to say that in 2007, before the outbreak of the world crisis, the Vix had dropped to 10. In 2008 it moved around 30 to splash close to 70 in the midst of the storm of the markets since January 2009. Calculated on the American market, the Vix is a good indicator of the overall volatility also on the European markets, which are closely connected with the USA: in these stormy weeks even the Ftse Mib has moved on the roller coaster, experimenting large intrady movements on securities, starting with banks, among the most liquid and representative securities of the Piazza Affari index. Just look at Unicredit which again today was the protagonist of a 9% hike in quotations, going from a low in the morning of 0,671 to 0,731. Although, some traders point out, it's when the Vix is high that it's time to buy.
