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OVX
’Long oil? No, long the volatility of oil
This piece was written for FT Alphaville by Gregor Macdonald, an independent energy analyst and investor based in Amherst, Massachusetts.
The CBOE kicked off the second half of 2008 with a new volatility product:
“The mere fact that there is an oil VIX means we probably topped in oil”
So, this OVX index. What’s it all about?
According to the CBOE, which launched the so-called Oil Volatility Index on Tuesday:
The OVX, or “Oil VIX,” measures the market’s expectation of 30-day volatility of crude oil prices by applying the well-known CBOE Volatility Index (VIX) methodology to options on the United States Oil Fund,