Tuesday, May 19, 2009

Volatility Index Passes Key Psychological Level

The Chicago Board Options Exchange Volatility Index, Wall Street's favorite measure of investor concern, pierced the psychological 30 level Tuesday for the first time in eight months, indicating the perceived need for portfolio insurance is diminishing.

The VIX, calculated from Standard & Poor's 500 index option prices, tracks the market's expectation of future volatility over the next 30-day period and often moves inversely to the S&P benchmark.

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