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The illiquidity point is valid for the listed market....recognize from the
perspective of the writer(derivative research head at SalomonSmithBarney)the
"upstairs" markets in these products are often more liquid and in "quiet" markets
often superior.
BobRABCDEF wrote:
> The Barron's article said that sector index options and the NDX options might
> be less expensive than snp options. The liquidity and volatility factors
> alone kill that notion.
> That chart went with the previous post.
>
> BobR
>
> In a message dated 98-05-24 16:22:00 EDT, you write:
>
> << Subj: Re: GEN - Barrons VIX Article
> Date: 98-05-24 16:22:00 EDT
> From: stansan@xxxxxxx (Stan Rubenstein)
> Reply-to: stansan@xxxxxxx
> To: BobRABCDEF@xxxxxxx
> CC: realtraders@xxxxxxxxxxxxxx
>
> Bob,
> Your attached chart shows the NDX (NASDAQ 100) statistical and implied
> volatilities. How does this bear on the use of VIX (OEX iv) as discussed in
> the Barron's article.
>
> Another point for others on this list:
> If any stock's volatility shrinks it usually shows up in a chart pattern
> that
> reveals "basing" or trading in a narrowing range. According to chart
> pattern readers such "congestion" or basing usually is followed by a
> breakout up or down.
>
> I draw the conclusion that the recent decliine in VIX is an indication
> that the market is poised for a move - but the question is Up or Down?
>
> Any comments?
> STAN
> >>
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