It’s baaacccck…volatility, that is.
Over the past year, volatility was virtually absent from equity markets. From November 4, 2016, to the peak of January 26, 2018, the S&P 500 returned a staggering 41.2% on a total return basis. The VIX (Chicago Board Options Exchange SPX Volatility Index) hovered near record lows, dropping to 8.56 on November 24, 2017. January’s 5.73% gain in the S&P 500 was the index’s best start to a year since 1990. That tranquility disappeared in early February, with both the S&P and Dow dropping into correction territory, and the VIX hitting a high of 50 on February 6, 2018. Those big moves continued throughout February, with the S&P logging its worst monthly drop in two years.
So, what happened? Like the Mad Libs we played as kids, you can fill in the blank for why you think the market dropped so quickly: the January jobs report that was too good; concerns over stronger-than-expected inflation; fears of an aggressive pace of Federal interest-rate hikes; the blackout period for share repurchases; or computer-driven selling creating a snowball effect. Regardless of the reason, volatility is back.
The sudden spike in volatility put a squeeze on shorts and caused many strategies to head to the exits on their equity holdings. In times like these, you need a trader with experience.
CAPIS has been serving clients for over 40 years. Our experienced traders know how to navigate these turbulent waters.
- CAPIS’ Domestic Equity traders have an average of 17 years of experience at CAPIS (over 20 years of industry experience).
- Our Program/Transition team has been trading together for 14 years.
- CAPIS’ international traders have an average of 20 years industry experience.
- The head of our Fixed income desk has over 25 years of industry experience.
- The head of our derivatives desk has over 30 years of experience, including time as a floor trader on the Chicago Board of Trade.
Our traders have been through the flash crash, the 2008 financial crisis, the dot-com bubble of 2000 and everything in between. We’re a seasoned group of veterans. You can trust that your orders are being worked the way they should be, with best execution for our clients always our goal.
If you have questions about our trading desk, please contact your trader or call our desk at 1-800-527-5756 and ask for Jason Gatewood, Executive Director of Trading.