Why Is Everyone Bad-Mouthing $VIX?

By Lawrence G. McMillan

There are always critics sniping at $VIX, but they are usually fringe players – often with an axe to grind, such as promoting their own version of volatility calculation or something like that.  But recently, the criticism has grown much larger and is coming from the center of the investment landscape.  One case in point is a well-publicized interview of a senior Citibank officer by a Reuters reporter this week.  I can also tell that the critics are vocal, because the CBOE put out a blog yesterday describing what $VIX is, what it’s supposed to do, how it’s been performing, and so forth.  In this article, we’ll put our spin on this.  We have written so much about what $VIX is and how it performs, that we are certainly qualified to enter this debate...

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