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Feb 23

VIX up 26% this morning

With all of the risks that exist in the global economy and political scene I’ve been amazed at how low equity market volatility has gotten in recent months. I also have to admit that my thoughts about current equity markets is that they are more momentum driven than any great fundamental reason so the only equity market bet I’ve been prepared to be vocal on in recent months has been the volatility bet.

When the VIX gets towards mid-teens in this global environment I’m fairly comfortable that the upside risk is so much greater than the downside…hence that is my simple bet. I haven’t really known what will necessarily result in an upward spike on volatility…generally Euro-sovereign related…but who would have guessed that Libya would be the latest catalyst.

Anyway, overnight the VIX increased 26% which is a nice return if you can get it.

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