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You Should Probably Just Ignore the VIX – Linkfest (July 23)

Your daily dose of some of the best reads elsewhere on Wall Street


Ah, the Volatility Index — or VIX for short. Essentially, it’s the implied volatility of S&P 500 index options. More often than not, it gets referred to as the the “fear index,” because it represents the market’s expectation of stock market volatility over the next 30-day period. Either way, most investors use it completely wrong and make observations about impending market crashes or corrections. Want more proof that the VIX shouldn’t be used to gauge fear? Here’s Gregory W. Harmon at Dragon Fly Capital showing that when the VIX spikes, so does the market.

Schaeffer’s Trading Floor Blog (Adam Warner): Recent events have made the VIX overbought.

Naked Capitalism (Lambert Strether): Maybe we should forget the VIX. There are always conflicts and non-stock related issues.

Option Monster (Chris McKhann): After a big spike in the VIX, the S&P 500 hits an all-time high. (Dave Nadig): And since playing volatility & VIX futures requires more luck than skill, you’re better off walking away.

Pension Partners (Charlie Bilello): Still worried about the VIX and recent market issues? You don’t have to go “all-in” on cash.

Washington Post WonkBlog (Roberto A. Ferdman): We just love Chipotle (CMG) burritos. Seriously. Can’t live without ’em.

Bloomberg (Craig Torres and Kristen Haunss): You’re not kidding by calling them “junk.” High-yield bonds’ credit quality is slipping further and further.

Bloomberg View (Kavitha A. Davidson): A basketball star adds venture capitalism to his resume. ‘Melo starts a VC firm.

TechCrunch (Greg Kumparak): Nice tattoo, bro. Really sick tat. Wait…? Where did all my cellphone data go?

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