2 reasons why the market
Goldman
Goldman Sachs highlights two reasons why volatility is now less likely to wreak that type of havoc on the equity market anytime soon.
It was a scary  unprecedented situation for all involved  and traders would be right to feel uncertain about how to proceed. But  Goldman Sachs  is here to put their minds at ease.
 The firm  first uses the chart below to show that the impact of a similar volatility unwinding is the lowest in years. As a result   Goldman  equity derivatives strategist Rocky Fishman says investors don't have to worry about a similar VIX spike for quite some time.
Secondly   Goldman  notes that heading into this week's market reckoning  prices on VIX options were "abnormally high " considering the low level of volatility being reflected by the spot VIX.  Fishman  says this means investors had "priced in some risk of outsized short VIX exchange-traded products causing turmoil like Monday's."
In other words  investors were on edge  even if the traditional VIX measure wasn't reflecting their concern. However   Goldman  says that volatility being implied by VIX options will decline following this week's events. And that means VIX futures will be less primed to explode higher on market turbulence.
What  Goldman  is saying is that the conditions that left the VIX spring-loaded to explode higher are much more subdued now. The market largely got its short-volatility addiction out of its system  and that will help it avoid the type of pain seen earlier this week â at least for now.
 [TGT]  highlights two reasons why volatility is now less likely to wreak that type of havoc on the equity market anytime soon.
It was a scary  unprecedented situation for all involved  and traders would be right to feel uncertain about how to proceed. But   [TGT] is here to put their minds at ease.
  [TGT] first uses the chart below to show that the impact of a similar volatility unwinding is the lowest in years. As a result    [TGT] equity derivatives strategist Rocky Fishman says investors don't have to worry about a similar VIX spike for quite some time.
Secondly    [TGT] notes that heading into this week's market reckoning  prices on VIX options were "abnormally high " considering the low level of volatility being reflected by the spot VIX.   [TGT] says this means investors had "priced in some risk of outsized short VIX exchange-traded products causing turmoil like Monday's."
In other words  investors were on edge  even if the traditional VIX measure wasn't reflecting their concern. However    [TGT] says that volatility being implied by VIX options will decline following this week's events. And that means VIX futures will be less primed to explode higher on market turbulence.
What   [TGT] is saying is that the conditions that left the VIX spring-loaded to explode higher are much more subdued now. The market largely got its short-volatility addiction out of its system  and that will help it avoid the type of pain seen earlier this week â at least for now.