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Expect some wild swings in Apple as Nasdaq’s volatility index rises



Tesla and Apple have both caused the Nasdaq 100 to hit full-time highs, but a volatility indicator suggests that investors may face some wild turns. The CBOE Nasdaq Volatility Index has risen over 10% in the last five days. A higher CBOE volatility figure reflects increased investor nervousness.

US stock indices are rising

Saloni Sardana for Business Insider:

The CBOE Nasdaq Volatility Index, which tracks the volatility of options on the Nasdaq 100 Index, has risen by around 50% in the last three weeks, having merged in a steady range since mid-May. The index was last up 10% around 40.44, marking a nearly two-month high from 11:40 ET.

Just like Wall Street’s favorite “fear index”, the VIX or CBOE Volatility Index, which tracks the option’s volatility for the S&P 500, the higher the value, the greater the investor’s nervousness.

What is unusual is that the Nasdaq volatility index rises in line with the underlying index. The opposite is more common. This would suggest that while investors are happy to buy everything from electric car maker Tesla, to Apple, to Facebook, they are not worried about a reversal in the technology sector’s fortunes.

Apple’s and Tesla’s stock prices could explode by about 33% in the 12 months after the stock split, the multi-asset investment platform eToro said last week. The company analyzed 60 years of data and found that on average, megabrands that shared their shares saw their share prices increase by a third a year after the split.

MacDailyNews Take: Stop in for some volatility Apple longs for!


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