August 27, 2013 – Stock indexes fell today (Tuesday) as a story at www.wsj.com noted —
“… the sell-off extends a decline from recent weeks blamed on expectations that the Federal Reserve will decide in September to scale back its economic stimulus efforts. Adding to the negative tone Tuesday is increased saber rattling on Capitol Hill over the potential for a political battle over raising of the U.S. federal debt limit. The S&P 500-stock index fell 26.30 points, or 1.6%, to 1630.48 and the Nasdaq Composite Index slid 79.05 points, or 2.2%, to 3578.52. … ‘Lower volume generally breeds greater volatility,’ Mr. Landesman said. … the escalating tensions over Syria have pushed up oil prices and other assets seen as havens during times of crisis, such as U.S. Treasurys and gold. …”
VOLATILITY INDEXES TODAY
Today the OVX Index rose 16.0%; VXEFA rose 15.4%; and VIX rose 11.9%, while two indexes related to interest rate volatility fell, as the VXTYN Index fell 0.8% and the SRVX Index declined 2.1%. www.cboe.com/volatility
VIX FUTURES PRICES AND EXPECTATATIONS OF FORWARD VOLATILITY
Many investors would like to gain a better understanding of the expectations for forward volatility in the coming autumn months. One good resource is the VIX website at www.cboe.com/VIX, which has a link to a VIX term structure page, and also has the table below that shows that VIX is in contango as today’s closing prices were 16.77 for VIX spot index, 17.20 for VIX Sept. ’13 futures, 17.85 for VIX Oct. ’13 futures, and 18.40 for VIX Nov. ’13 futures.