Join our community of smart investors

2018: A year in charts

Eight charts highlighting some of the biggest financial stories of the year
2018: A year in charts


1. Vix spikes

By the end of 2017, City pundits were warning that the unusually placid trading patterns seen through much of the year in equity markets could prefigure something a little more extreme – and so it proved. The CBOE Volatility index (Vix) spiked in the early part of February in response to an increase in negative option positions on the S&P 500 (SPX). It marked the largest daily movement in the so-called ‘fear gauge’ on record, with around $3.8 trillion wiped off the value of stock markets globally, although the losses weren’t confined to equities. Investors who had been profiting from the eerie calm in the lead-up to February, took a bath on the ‘short-vol trade’ – effectively bets against stock market volatility through exchange traded notes. The oscillations in the Vix, which tends to maintain an inverse correlation to equity prices, resulted in Credit Suisse liquidating one investment product – its Short Volatility Exchange Traded Note – and more than a dozen others were halted after their values sank toward zero. A relative period of calm ensued, although the Vix recently hit its highest level since February’s spike as stocks retraced on escalating global growth fears.

To continue reading...
Register for free
Read 3 articles for free each month
Have an account? Sign in