When was the last time the market displayed this degree of volatility?

Question

When was the last time the market displayed this degree of volatility?

Answer 1

The answer depends in part on what you define as the market. One of the other answers recommended using the VIX index to measure the volatility of market. You need to understand that

(1) VIX is based on the S&P 500, so it does not reflect the volatility of smaller cap stocks and

(2) VIX actually measures anticipated volatility, not actual volatility.

If you are not familiar with VIX you can find out more about it at

http://www.cboe.com/micro/vix/vixoptions...

If you want to use the S&P 500 as "the market" you can get a graph of the actual volatility at

http://www.ivolatility.com/options.j?tic...

The blue line on that graph (historical volatility) represents the actual volatility.

The table on the same page also shows that current historical volatility is about 20%, but was closer to 30% about six months ago.

You should be aware that smaller cap stocks will usually be more volatile then large cap stocks. For example, if you look at the same table and chart for the Russell 2000 index you will see higher volatility.

http://www.ivolatility.com/options.j?tic...