When we look back at the year 2017, will we remember it for its great lack of fear in the stock market or will it be seen as one of many years where we saw decreasing volatility as stocks become a “safer” asset? Tom gives his opinion with several statistics as to whether 2018 will see greater volatility.
After presenting in-depth context around the tight range that we saw inin 2017, the guys dig deeper into the historical likeliness of a large move coming after a very calm period in the stock market. We see that the market has a memorylessness to it that does not make a large move any more likely after contained days and years.
However, we have seen years similar to this in the past, and eventually we saw a return to large moves in the stock market, increased fear, and more expensive options prices. The problem of attempting to trade off of this information has to do with timing, though, and how difficult it can be to predict future stock market shakeups.
For further information and context given by Tom Sosnoff, view the video above.