Volatility continued to surge Monday following a tumultuous week for the markets. The CBOE Volatility index, otherwise referred to as the VIX is now trading above 25, its highest level since late September–this as the S&P 500, Dow Jones industrial average and Nasdaq Composite have all fallen 3 percent or more month-to-date. With experts calling for heightened volatility in anticipation of the Fed announcement later this week, traders can seek monetary protection with a simple strategy.
“A reading [above] 25 in the VIX is above its historical average,” Mike Khouw said Friday on CNBC’s “Options Action.” The VIX has traded below 20 for most of the year.
