convergex u s market volatility survey

8/12/2019 ConvergEx U S Market Volatility Survey

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U.S. Market Volatility Survey

July 2014


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On Top of the Markets | Ahead of the Curve

Note from Anthony Saliba

1

When will volatility return?

As U.S. stock indexes continue to hit new all-time highs in 2014, investment professionals have

asked the question endlessly. The CBOEVolatility Index (VIX), considered by many to be the

world's best barometer of investor sentiment and market volatility, is down more than 11% for the

year at the time of this writing. Yes, we have seen occasional spikes, but the downward trend has

quickly resumed each time. Do the bulls still have room to run?

The results of our U.S. Market Volatili ty Survey reveal an investment community expecting

volatility to rise soon 81% expect a rise by the end of the year but worried that its own members

are being too complacent. In fact, two-thirds (66%) of our respondents say that market participantsare too complacent or much too complacent, not buying the protection that options represent and

the VIX measures.

Market participants are also clear on where they think volatility will come from: a majority (51%) of

those surveyed identified U.S. Federal Reserve policy as the most l ikely driver of a near-term spike

in volatility, far more than the number who named events in the Middle East (16%) or Ukraine

(14%).

Every day, we hear from our clients on this topic. Whether its the buy-side looking for the best

strategies in a low volatility environment, or sell-side worries as the VIXs fear index remains low,

we stand ready to help our clients with our experience and technologies.

We hope this survey helps you make sense of the current situation and helps quantify feelings that

arent showing up in the VIX yet.

Anthony Sal iba

Executive Managing Director, ConvergEx Group


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On Top of the Markets | Ahead of the Curve2


Please identify the type of company you work for :

Sell-side

Buy-side

Individual/Retail Investor

Service Provider

Other

34%

3%

10%

8%


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On Top of the Markets | Ahead of the Curve

6%

53%

33%

8%

3


Do you believe the CBOEVolatil ity Index (VIX) is an

accurate forecast of short term U.S. stock market volatility?

Not Accurate /

Not At All Accurate

Very Accurate

Accurate

Neutral


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What macro dr iver is most l ikely to cause a near term

spike in U.S. Market volatil ity?

Other

U.S. Central

Bank Policy

Foreign Central

Bank Policy

Events in Ukraine

Events In Middle East

15%


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Do you believe investors in the capital markets are too complacent

at the moment given historically low volatility levels?

16%

50%

23%

9%

2%


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In your opinion, which major capital market is the most

complacent at this t ime?

50%

25%

9%

6%

3%

7%


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Has the low U.S. Market volati lity been good or bad for your

business?

9%

29%

34%

21%

6%


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Has the low U.S. Market volati lity been good or bad for your

business?

Bad/Very Bad

Good/Very Good

Sell-side

Buy-side

Sell-side

Buy-side


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What are your estimates for the CBOE VIX Index for September 30th

and December 31st? (on 7/23/14 the Index was @11.60)


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Do you use listed options in your investment strategy?

35%


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convergex u s market volatility survey

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