Options Jive

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The Volatility Domino Effect

Options Jive

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Yesterday we saw an uptick in S&P 500 volatility, however, IV also rose in a variety of other markets.

Exploring this further, we find that prices of these other markets such as gold, bonds, and crude, move with almost no correlation to stocks. However, the implied volatilities of these markets are correlated to the S&P 500 volatility.

This makes the case that opportunity in trading options can rise, as a function of rising IV, even if the price movement is exclusive to the stock market.

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