Matt Levine, Columnist

VIX Trading, Hoaxes and Blockchain

Also oil data, executive business education, fat unicorns and bond market liquidity.

May 24, 2017 at 1:31 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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VIX manipulation!?

The CBOE Volatility Index -- the VIX -- is a measure of expected volatility in the S&P 500 index. People pay more for options when they expect prices to be volatile, and you can compute implied volatility from option prices. So the VIX looks at the trading prices of a bunch of out-of-the-money put and call options on the S&P 500 and computes a sort of average implied volatility from them. The methodology is in this white paper.