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Biggest Week Ever, Surprises With Nick and Jessica, IPOs Are Back With Aaron Dillon
The Compound and Friends
Expect the Unexpected: VIX Volatility Unveiled
Seasonal patterns in VIX volatility reveal that December often marks a significant low, with the index hitting its bottom nine times since 1990. This consistent seasonality persists despite widespread awareness among traders, challenging the assumption that market participants would strategically adjust to these trends. Additionally, analysis of presidential election years from 1990 indicates that volatility does not typically spike around elections as anticipated. Instead, the VIX has peaked mainly in the first half of election years, with a notable exception during major events like the 2008 financial crisis. While certain months like August and October exhibit increased volatility leading up to elections, the index generally reaches its lowest points in November or December. This data suggests that prevailing market beliefs about volatility surrounding elections may often be unfounded.
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