To say that the markets have been volatile recently would be an understatement. So let's take a fresh look at this roller coaster environment to better understand what's happening and how we might be able to profit from it.
Understanding the VIXThe most widely quoted volatility index is the CBOE (S&P 500) Volatility Index (VIX). While the VIX represents investor demand for options -- both puts and calls -- you can also view the VIX along the spectrum of market mindset:
Profit from Volatilty With Options: AppleI could not think of any better stock that represents investor sentiment and hedge fund activity than Apple ( AAPL). While Apple stock has fallen significantly since Sept. 19, volatility for the stock has skyrocketed. This is depicted in the following Bloomberg screen:
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