UBS 1/4: Don't expect the #volatility lull to last.
Wall Street’s most prominent gauge of investor anxiety, #VIX index of implied stock #volatility, closed at a fresh pandemic-era low near 16.7 last week. But we see reasons to expect periodic bouts of higher volatility near term
Wall Street’s most prominent gauge of investor anxiety, #VIX index of implied stock #volatility, closed at a fresh pandemic-era low near 16.7 last week. But we see reasons to expect periodic bouts of higher volatility near term
UBS 2/4: First, investors are likely to be torn between optimism over accelerating growth and worries over higher inflation. Second, optimism over the course of the pandemic is being tested by the spread of new variants of the virus.
UBS 3/4: Finally, we expect volatility to be driven by increased institutional and retail activity in the options market, along with the increased share of growth stocks in major indexes. However, investors can take advantage of this backdrop.
UBS 4/4: Low #volatility at present reduces the cost of locking in downside protection. Meanwhile, future downside #volatility can create better entry points for investors seeking to build longer-term exposure.
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