Is The Market Really Sure About Its Direction?

CoreDesignKEY/iStock via Getty Images By Dr. Mark Shore and Michael Copeland At a Glance While the skew ratio can suggest potential market direction, convexity is essential for assessing uncertainty and the cost of risk in out-of-the-money options. Comprehensive measures of implied volatility across various financial instruments are derived from the CME Group Volatility Index (CVOL) Markets rarely move in a straight line, and the stories behind their fluctuations are often far more complex than a simple ...