Volatility Has Spiked, Will It Continue?

CBOE surge at year-to-date high

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The trade war-induced sell-off has caused market volatility, as measured by the Chicago Board of Options Exchange (CBOE) Volatility Index to surge by over 70% in the past two days to 24, a year-to-date high.

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Volatility often used interchangeably for big moves

What sometimes gets lost in the broad discussion of VIX is the specifics of how does implied volatility get factored into individual option prices and impacts position profitability?  The term volatility gets thrown around a lot and is often used interchangeably for big moves, especially down, or perceived risk.

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