‘No panic’ as Nikkei volatility spikes, dealers say

Traders say no sign of short volatility hedging after Nikkei 225 plunges

Equity derivatives desks in Japan claim to have coped with a large spike in volatility after the Nikkei 225 index experienced its biggest daily fall since the devastating tsunami that hit the country in March 2011. Short-end volatility on the index leapt more than 16 points today, according to the Nikkei Stock Average Volatility Index, as spot plunged from the previous day's close of 15,627.26 to 14,483.98, a drop of 7.32%.

Despite that spike in volatility, equity derivatives dealers believe the