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CBOE VIX shoots higher as markets swing from gains to losses

FXStreet (Mumbai) - The CBOE volatility Index has shot up as the US Equity markets erased their gains and trade marginally lower.

The VIX now trades at 17.51, up 1.51% from today’s low of 16.93. Implied Volatilities (IVs) usually shoot higher ahead of the key events like today’s US Federal Reserve (Fed) minutes. High IVs translates into increased option premiums as investors, hedge into Calls and Puts in anticipation of a big move.

The VIX has shot up from 11.70 to 17.00 levels post the US Federal Reserve September meet wherein the policymakers revised higher their interest rate projections for 2014. Technically, the VIX is trading near a make or break level of 18.00.

VIX technical levels

VIX has a strong resistance of 18.00, beyond which it can rise to 20 and 21.48 levels. On the other hand, failure to sustain above 17.00 levels today, shall open doors for the re-test of 11.740 levels.

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