VIX spikes 10% as Congress flounders

Remember the VIX? Probably not. Wall Street's measure of volatility has been pretty forgettable in 2012.

Not on Friday. The CBOE Volatility Index (VIX) spiked by as much as 10%, and by late afternoon was up 6%.

Congress and its inability to come together over the fiscal cliff wasn't the sole trigger of the heightened volatility. Friday was also quadruple witching day -- one of four trading days a year when investors close out futures and options contracts. Both types of contracts or derivatives let investors bet on the future price of a stock or any other type of asset. Trading volume typically spikes dramatically on "quad witching" days.

Today's sharp move up is one of the few big daily moves for the VIX this year, and even after the Friday surge, the VIX still hovers just below 19. That's well below 30, the level seen as indicating investor fear. The VIX hasn't hit 30 in 2012.

Read Full Article from CNNMoney

- Posted: 2012-12-21 16:32:36

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