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Generaally people's view varies. The assumption commonly is the price movement
and vol are inversely related. Declines usually are accompanied by increases in
vol. The "debate" arises over what is high and what is low.
The rerality is high and low vol is determined, not by the absolute level of
vol, but the expected future vol. If vol is considered low(expected to be
higher in the future)long premium makes more sense.
dbtg wrote:
> How does one interpret VIX? Thanks
> dn
> ------
>
> -----Original Message-----
> From: THE DOCTOR <droex@xxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Date: Tuesday, April 07, 1998 3:18 PM
> Subject: Re: Futr:Support/Resistance
>
> >VIX is a volatility measure as are Bollinger bands. They represent an
> >"expected" 1 standard deviation range. VIX is not an actual volatility but
> >rather a benchmark volatility calculated from 8 OEX options. Rather than
> >consider it as a pure vol you should view it as a benchmark measure.
> >
> >Marcelo Martinez wrote:
> >
> >> Can you use VIX as a volatility measure?
> >>
> >> >Volatility may be measured with Bollinger's Band Width Indicator
> (distance
> >> between
> >> >Bollinger Bands divided 20 days SMA of the close), plus its 5 (to 9)
> days
> >> EMA. I
> >> >normally look at crossovers and extremely low levels measured as the
> >> indicator being
> >> >below one third of the BWI highest measure of the last year.
> >> >
> >> >Alberto Torchio
> >> > Torino, Italy
> >> >
> >> >
> >> >
> >
> >
> >
> >
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