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August 05, 2011 at 01:42 PM
The Dow’s positive finish on Friday signaled a much more tempered day for the Chicago Board Options Exchange (CBOE) Volatility Index. The Index increased 35% on Thursday, as investors raced for defensive positions that utilize options in order to combat the 500 point selloff in the broad market.
The increase signaled the largest jump for the Index since July 1, 2010, notably surpassing its most recent peak in March, when Japan’s earthquake and resulting tsunami caused a nuclear crisis in that country.
Friday’s 60.93 point gain on the Dow meant the Volatility Index rose just 1.07% to 32, but hit an intraday high of 39.25, due to wide fluctuations in the market. In comparison, the Dow hit an intraday high of 11,555.41 and an intraday low of 11,139, a 416.41 swing.
