Volatility
With the markets in an uncertain pattern, I got thinking about volatility and how to play it. It seems with everyone on edge about interest rates, recessionary fears, and financial writedowns, that the market is exhibiting higher volatility. Does anyone know of a way to play this via the stock market or can you only buy options on the VIX?
posted by Des @ 12/17/2007 03:17:00 PM
3 Comments:
The problem is that when volatility is high the options are expensive too.
As far as I know, options are the way to play VIX. But isn't that how LTCM lost billions and put the worldwide financial system in jeopardy?
I just couldn't live with that guilt :)
I think MO/KO is a safer play on volatility ;)
I guess you're right about the pricing of volatility. You have to buy it when its low!
Greedy bankers are why the credit system isn't working properly. I just read this morning about TD bank's refusal to join the ABCP bail-out. I say kudos to TD for not selling this stuff in the first place. The markets should be allowed to work properly. Like someone once said: "It's not a demand problem, it's a pricing problem" Too many greedy bankers don't want to take a haircut on their ill-advised loaning.
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