So how about we revisit the "SKF=Fear Index" notion now that America's Most Insane Inverse Product is on the move again.
The chart here measures 10 Day historical volatility of SKF stock itself. Most historical volatility charts cover 30 days, the same timeframe the VIX seeks to express, and thus the historical chart tends to lag action in the here and now. A 10 day chart clearly has more noise, but also rings closer to how the stock feels.
And this one clearly feels pretty wild.
Now it's going to compress a little bit, as data from the crazy ranged expiration week moves out of the system. But by the same token, the trend of the last couple days is towards big ranges again.
Bottom line is that once again, the relatively tame VIX on the screen fails to capture the generational fluctuations going on not much below the surface.
3 comments:
must be time to sell another straddle on SKF again soon and close our eyes and cross our fingers, lol
The stock prices of the individual fin svcs companies are so low that in nominal terms move seem "small" but in percentage terms....YOWZA!
In other words, the 150% volatility question is..."How crappy is the crap on their balance sheet really?...and when will we REALLY know it?"
Once we do, Americas Most Insane Inverse Product should settle into, maybe, $85.
Yep...sell that sucker. But only if someone will tell me when.
sean: Rio Straddle Time indeed. Sell straddles, use the proceeds to fund a trip to Rio. If the straddles win, come back, if not, you've paid for the trip anyway, lol.
Karl: No question. It's at the point where a 5 cent move in like C or JPM or FNM is 8 points in SKF. Or so it seems.
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