when 's maket volatility going to stop, after fed meeting?

Answer 1

For the record, by recent historical standard the market volatility is rather moderate right now. The CBOE volatility index, also called VIX, that reflects the average volatility embedded in all the stock options traded on the stock market trades at only $16. Back in 2002 and 2003, it often traded above $40.

The VIX is a good indicator because the volatility embedded in the price of a stock option is essentially the volatility in the price of the underlying stock.

Regardless of the upcoming fed meeting, volatility is bound to go up. Everyone has already priced a couple extra increases in the Fed Funds rate. But, GDP growth, inflation, oil prices, geopolitical risk (Iran, North Korea, Iraq) add up to a lot of uncertainty that will be priced as increased volatility as reflected in the VIX and the stock market.

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Answer 2

Market volatility is the options trader's best friend.