Volatility may have dropped to 10-year lows but it doesn't necessarily mean there is complacency in the market, strategist Liz Ann Sonders told CNBC on Tuesday.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, on Tuesday traded below 10, near levels not seen since December 2006. That has some traders concerned about investors growing too carefree about the bull market.
However, the VIX is "more of a coincident indicator than it is it is a forward-looking indicator of some sort of impending doom for the market," the chief investment strategist at Charles Schwab said in an interview with "Power Lunch."
She believes there are more nuanced reasons than complacency for the suppressed volatility, like the rise of exchange-traded funds and investors finding other ways to hedge besides S&P 500 index options.