(Harvest) Volatility continues to reside at perplexingly low levels. The Chicago Board Options Exchange (CBOE) Volatility Index – better known as the VIX – recently experienced its longest streak of consecutive trading days below 10, which is well below its long-term average of roughly 19. Investors seem to assume that “lower for longer” or even “lower forever” is the new normal when it comes to volatility and may be complacent about the potential risks surrounding this assumption.
Lower Volatility Forever? Don’t Bet on It
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