Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
This is a volatility index, similar to the VIX, but designed specifically to gauge the likelihood of a large selloff (> 2 standard deviations). As I understand the interpretation of the index, when it is high, traders are more concerned about a large selloff in the near future. When it's low, traders do not anticipate a large selloff.
I don't follow the SKEW closely but noticed that it just hit its low of the year. This surprises me as I would have expected it to rise as the market declined in the face of weak economic data over the past few weeks. Any thoughts on how to interpret what this means?
The index only been published for a few months so there isn't enough data to tell. The CBOE has issued a paper explaining what the index measures and how to interpret it:
According to that document, there is a correlation between the SKEW and the odds of a large selloff. At current levels, there's about a 6% chance of a >2 standard deviation selloff in the next 30 days, which is on the low end. I'm not sure how much stock to put in this and am curious if anyone here knows more about the SKEW than I do.