Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Goldman Sachs: Seeing the Forest for the Green Shoots

By

Volatility could keep getting uglier.

PrintPRINT
So, let's see: We have a major name here, Goldman Sachs (GS). Question to all of you: How do you think 30-day implied volatility compares to any time over the past 9 months?


Click here to enlarge.

Anyone? Anyone? Bueller?

OK, time's up. It's at low ebb. The chart below shows only the past 6 months, so you'll have to trust me on this one.


Click here to enlarge.

Okay, question 2: Does that make options a net buy?

Well, not necessarily. 10-day historical volatility (or HV) keeps dribbling lower, and now sits just south of 40. But in longer-term context, if green shoots are really upon us, it's not that low. Goldman Sachs HV typically hovers in the mid-20s.

Do I think volatility is headed back to boring, lackluster levels here, there, and everywhere?

I really don't know. But it's worth remembering that while options feel dirt cheap given the experience of the past year, if this is really 2003 again, then volatility could keep getting uglier.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE