Not so long ago, it took three business days for funds traded in Capital Markets to “Settle” … a Wall Street term for being available. Today, just as computers, cars, athletes and Capital Market trading Settlement is faster (overnight now) … Markets themselves are much faster!
Last week the VIX a volatility measure had the second greatest percentage move ever… We know it is Holiday season, but there are some conclusions that can be garnered before we get too far from the event, which by the way caught very little attention as the Capital Markets stabilized quickly THIS TIME … so let’s dig it, we will keep it short!
Here is a great article we wrote in 2018 about the VIX – (Volatility Index) …. just in case you need a refresher …
2018 was a similar time in market history as there were new instruments rolling out then. Today we have relatively new ODTE (Zero date to expiration options) – here is our detailed review of these, again as a refresher …
So last week the VIX index jumped 75% in one day !
- Capital Markets are moving faster than ever …
- Market Structure (new products) are leading to even faster moves …
- Daily moves of significant percentages are likely the norm …
Given these expedited moves, it is increasing important for us to stay away from knee jerk reactions and keep investment portfolios well within our risk tolerances! This is especially important if a major player does not follow this statement and causes major market disruption. An event more likely to occur with all of this extra speed!
Have a Great “VIX Speed Reminder” Day!
John A. Kvale CFA, CFP
AI Content Authenticity: All of the following text content has been completed by myself and has not been edited or created by AI. Occasionally we do use AI for images and will note when appropriate.
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
