Juniper's combination of accessibility, services, and the human touch is impressive, but the dust may not settle until digital signatures and electronic payment services become pervasive. On September 1, the Nasdaq was trading above 4,200, and many investors thought tech stocks were ripe to rise. If they had been watching the Volatility Index, they would have seen clear evidence to the contrary. The VIX scraped the bottom of its historical range that day, and, sure enough, share prices began a four-week decline in which the Nasdaq dropped by almost 15 percent. The optimists had ignored the fear factor.
Options traders buy calls when they expect prices to rise and puts when they expect prices to fall.
Generally, investors buy OEX puts as a hedge against fluctuations in the larger market. Thus, the VIX measures the premium investors are paying for downside protection. When investors are anxious about the future, they're willing to pay more for them. Just as people will accept higher insurance premiums if they think an earthquake is imminent, investors will pay more for puts if they think the market is about to dive. Taking advantage of this information isn't so straightforward.