Volatility Gauges Surge Worldwide Amid European Banking Concern
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U.S. and European options gauges surged after Morgan Stanley cut its forecast for global growth, concern grew that European banks lack sufficient capital and hopes for more stimulus from the Federal Reserve receded.
The VIX, as the Chicago Board Options Exchange Volatility Index is known, jumped 35 percent to 42.67 at 4:15 p.m. in New York for the third-highest close of 2011. The VStoxx Index, which measures the cost of Euro Stoxx 50 Index options, snapped a five-day losing streak to gain 35 percent, the most since May 2010, to 47.17. Volatility gauges in Hong Kong, South Korea, Japan and India also rose.