The CBOE Volatility Index (VIX),widely considered the best gauge of fear in the market, rose above 17 on Thursday. James Strugger, derivatives strategists at MKM Partners warned investors that the VIX is likely to climb further.
“Over the last 30 years, volatility cycles have averaged about 5.5 years in duration and we’re about 3.5 years into this cycle, so we see another two years of high-volatility regime,” Strugger told CNBC.
Strugger said he expects to see “periodic spikes” in the VIX up to around the 30-level, triggered by multiple different economic factors including the sovereign debt crisis in Europe.
“Over the next few weeks, we’d recommend legging into long volatility trades—that means VIX options,” he suggested. “There’s also a laundry list of new VIX ETFs and ETNs people can use as well.”
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Thursday's Top Dow Gainers (as of this writing):
Bank of America
No immediate information was available for Strugger or his firm.
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