Panic over - but aren’t you forgetting something?

Phew! The panic is over. Global markets are back and the flap that peaked in the second week of February is but a dim and distant memory. So what have we learnt from this huge and unprecedented volatility of the first few months of 2016?

I fear, not a lot.

Don't get me wrong, I have no issue with the fact that markets have rallied -- in some cases over 10 percent -- from their February 11th lows. In fact, the panic valuations in some areas such as European banking stocks, miners and the oil price itself looked ripe for a bounce and I doff my cap to the brave guys and gals in the market who dipped their toes when all about were shrieking about armageddon. I certainly didn't see the bottom when it came and fortune this time round has certainly favored the brave.

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Let's face it, Jamie Dimon's February 11th bottom will go down as the key turning point and the brash boss of JPMorgan deserves a lot of praise for plonking his own cash on the table and calling it like he saw it.

Looking at some of the numbers over the first three months of the year has been stunning. Oil has rallied over a third, the Dow Jones Industrial Average has gone up for five consecutive weeks and, coming into this week, the S&P500 was less than 4 percent from its May 20th intraday all-time high.

And yet for all the big recovery statistics out there, which may or may not turn out to be temporary, there is one measure which I can't help thinking is clearly showing the wrong price given everything that has happened: The VIX.

For those of you who don't know, I am a fully paid up member of the ex-Liffe Old Option Foggies Club. We're a strange archaic bunch who used to treat volatility as an asset class to be traded like any other asset: We bought when low and sold (ideally) when high.

However, we are an endangered species, especially in the days of central bank-manipulated markets. We are laughed out of trading rooms for suggesting that owning insurance premiums when they are trading at multimonth lows is a worthwhile exercise.

"Owning a decaying, limited lifespan asset that will only cost me money if the market stays where it is or goes up? Are you an idiot? Why would I do that? It's an indicator of fear you know and I have none!," they tell us, adding, "You can stick your jibber-jabber vegas and thetas and put them up your, your...well don't you know we've had the Dimon Bottom? All is rosy now."

So inspite of the VIX and other insurance products trading at lows not seen November 2015, nobody is thinking of picking up some cheap trading gamma, note I say trading rather than a buy and hold strategy for owning options.

It's the same every time and will forever be the way of it. When we are going up, they sell insurance policies, squeezing every drop of juice out of the short premiums and it'll be the same when we go down again and they all go on again about owning indexes of Fear.

In short, if you want to see how short-term the global marketplace can be, look no further than volatility indicators where the same mistakes occur cycle after cycle after cycle, often within only a couple of months.

Steve Sedgwick is co-anchor on Squawk Box Europe and is also CNBC's OPEC reporter. Follow him on Twitter @steve_sedgwick

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