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What do the following mean? SOX, VIX, VXN, VXO.

August 30, 2000

SOX – ticker for the semiconductor (chip) index

All three of the following measure market volatility:

VIX – The VIX, or volatility index, is a measure of the range of trading on S&P 500 options, a key measure of market expectations of near-term volatility conveyed by stock index option prices. It is a secondary indicator in that when volatility climbs, stocks tend to bottom and reverse. As an indicator, we look to see if the VIX is working in an inverse relationship to the direction of the averages. In other words, when the VIX spikes up higher (in the upper 20’s to low 30’s), we want to see the averages beaten back. When the VIX is in the low 20’s, we want to see the markets on a run up. If this pattern starts repeating itself, the VIX can be a reliable indicator.

VXN – measure of the volatility of the Nasdaq index

VXO – same as the VIX except for OEX options (S&P 100)

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