There's a Big Technical Reason for Low Volatility in Stocks
- Hedging damps stock moves in both directions: Deutsche Bank
- A 1% drop in S&P can spur $14 billion in dealer purchases
Three Charts Show Investors Are Avoiding Volatility
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To understand the listless VIX, look to Greek letters.
So say equity-derivatives analysts at Deutsche Bank AG, who argue that part of the reason the Chicago Board Options Exchange’s Volatility Index is hovering at multi-decade lows has to do with hedging by large banks, along with rebalancing activity tied to exchange-traded products.