With a hat tip to Bill Luby at Vix and More the volatility family tree as he calls it has grown with the addition of CBOE Gold Volatility Index (GVZ) and CBOE EuroCurrency Volatility Index (EVZ). These are in addition to the recently added CBOE Oil Volatility Index (OVX).
I continue to believe (or maybe hope?) that these sorts of products will eventually evolve into tools that can be used in portfolio construction. I'm not sure if this means used individually to somehow create a hedge or a fund the blends together many different volatility indexes into some sort of absolute strategy or something else.
I'm not too worried about being the guy that figures this out, just hopeful that something happens here. The world seems like it is trying to figure out what to really do with these and it is a good bet that there is a very useful application here.
A different subject; as soon as oil has two up days in a row again will the oil going to $200 guys all get invited back on TV?
Did anyone watch the new personal finance show on CNBC last night? I toggled between Red Sox Royals and CNBC Asia (tivo users know what I'm talking about). If anyone watched and has input please leave it in the comments.
Wikinvest Wire
8 comments:
Thanks for the mention, Roger.
I too share that hope -- and I think we are getting closer to that day where one can go long USO/GLD/FXE and hedge with options or futures based on the associated volatility index instead of with puts on the underlying. I'd really like to see this with sector ETFs (especially financials) and country/region ETFs for the likes of China, Brazil, emerging markets, etc.
In the meantime, the proliferation of ETFs creates some new volatility-based strategies from do-it-yourself ETF buy-writes, to long-short portfolios, etc. With ETFs, almost every asset class and security type now has a corresponding volatility component to analyze.
Cheers,
-Bill
Roger- thanks for you thoughts and road map... I tend to think that there is significant more carnage in the financials.. How Mer can write down $30B to 1.5B (.22-.165 = .055 net)and NAB can write down 850M to $85M and the rest of the street stay hidden off the balance sheet. There will be a day of reckoning...each of the last bottoms came out of pessimism... we are a long way from that currently....SO until we flush I really don't have an interest as of now....
"Did anyone watch the new personal finance show on CNBC last night?"
I saw some of the show. I believe
it will help some desperate people
sort through their money problems.
It certainly offers more advice
than 'cut up your credit cards.'
They have information about
organizations to consolidate loans
etc. I kept waiting for them to
suggest 'get a part-time job
if possible' but I didn't hear it...even if you are a stay at home mom you can sit someone elses
children for extra $. I think it would be a good show to watch as a family....especially with teenagers:-)
I agree 100%... speaking of part time jobs.... the unemployment rate as reported last week was 5.7% if you add the part timers into that mix you get 9.8% unemployment which is the biggest number in quite awhile... I think the early 80's...
Roger-
Your sense of humor is tops, as well as the amazing photos you post.
I very much digest your wisdom, and so appreciate your insights.
Umm, just for fun, please google 'site meter'.
I use Stat Counter.
Don't stop. I'd miss you too much.
Melissa(coralreefpainter)
I caught part of the show while receiving a massage in my suite at Niagara Falls, Ontario - so my view is shaded. That said, CNBC has accomplished some overdue housecleaning to keep their ranking as the number one business channel. This show is pretty good.
Money programs on a business cable network probably should be broadcast on network tv with more bells, whistles and prizes. Why preach to the choir?
Cutting up your credit cards to assist getting out of debt is practically the only solution for many with a poor financial backround. Ramsey on Fox Business may be too religious and "simple" for financial bloggers, but his advice is honest and forces individuals to bite the financial bullet. That is a good thing.
Sure wish public schools would take as much time to educate students in financial matters as they do putting condoms on cucumbers (an unrealistic expectation, but I digress).
T
thank you Melissa.
thanks to all for the CWU tv show feedback too
Roger,
I caught the new CNBC show, and it was different from the one-man (or one-woman) bands known as Ramsey and Orman. Ulrich spent a good amount of time on each family, and used a team of people to look at various aspects of their financial picture. She had a credit score "expert", a community housing consultant, etc. I was impressed with the overall attention to detail.
That said, it's relatively boring television. Like it or not, shows like Fast Money are much more entertaining.
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