Vix challenged by new volatility index

For 20 years, Chicago-based CBOE has marketed the Vix as the only volatility measure investors need. Across town, a tiny upstart is challenging this. Will its new index win over the world’s biggest banks? Yakob Peterseil reports

storms

There is a bewildering array of volatility-linked products in existence, but virtually all of them have one thing in common: they are based on the Vix. Developed 20 years ago, the Vix index, known as the "investor fear gauge", measures investors' expectations of what stock market volatility will be in the near term. Not only is it the only volatility measure routinely quoted on the evening news, the Vix enjoys an effective monopoly on exchange-traded funds (ETFs) and exchange-traded notes (ETNs)

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