Matt Levine, Columnist

The VIX Is Not A Great Way to Measure Complacency

It is a great way to measure realized volatility though. I mean, trailing realized volatility.

June 9, 2014 at 8:26 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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A basic story that is told over and over again about financial markets is:

This is I think roughly the way to read the notion, which my Bloomberg View colleague Mohamed El-Erian examined today, that low readings on the VIX -- an index of implied volatility in short-dated S&P 500 index options -- mean that the market is "complacent." So: