V for Volatility

Last summer I drew your attention to the CBOE Volatility (VIX) index, which at the time was, like the Baltic Dry Index, a relatively low-profile stock market metric that had started to look very odd. (My own familiarity with the VIX index is the legacy of two years of early morning meetings with a a cranky trader/analyst who I long assumed lived in another part of the country because he always dialled in to the meeting rather than walking the one flight of stairs down to the boardroom.)

These days, everyone’s a VIX voyeur. And yesterday, it finally shot up over 30, confirming (for anyone with remaining doubts) that things are pretty choppy out there. This is a big deal, because apparently some were convinced that if the VIX wasn’t shooting up everything was really OK.

There is a volatility index for the Canadian markets as well. As far as I can tell, the Montreal implied volatility index has only been around for a few years and is at an all-time high — not surprising, given today’s exciting buffeting of the TSX.

Ride’em, cowboy! (Isn’t the Stampede on?)

In the US, volatility is most visible as it spills out onto the streets. So far here it’s just sparked the revival of the same old story:

CIBC woes may spark mergers, analyst says