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During this selloff, traders have seen huge movements in the market, but also huge movements in market IV (the VIX). Volatility bounces, or rapid expansions in market IV followed by a rapid contraction, happen in all market environments and long-term phases of the VIX (expansion, contraction, and lull). Today Tom and Tony discuss what constitutes a bounce, and how likely they are to happen depending on the market environment.
During this selloff, traders have seen huge movements in the market, but also huge movements in market IV (the VIX). Volatility bounces, or rapid expansions in market IV followed by a rapid contraction, happen in all market environments and long-term phases of the VIX (expansion, contraction, and lull). Today Tom and Tony discuss what constitutes a bounce, and how likely they are to happen depending on the market environment.