Bracing for a Return of Volatility
By STEVEN M. SEARS | MORE ARTICLES BY AUTHOR
Savvy options traders are taking advantage of the subdued VIX to buy low-cost protection
On Thursday, the stock market sent investors a critical message. If you failed to hear it, you missed information that matters more than the mostly rosy prognostications for the stock market in 2012 from Wall Street banks.
The message: Volatile volatility is back from winter vacation, and likely here to stay for all of 2012.
Even though stocks surged higher on Tuesday, the first day of the trading year, and inched higher on Wednesday, Thursday’s initial decline in response to renewed European jitters and the resulting dollar surge suggest the market remains trapped in a volatility vortex that defined 2011.