The best way to see this, however, is with a graph. You see huge upticks, particularly during the financial crisis. But VIX seems to drift back, sooner or later, to a certain base level.
So, the next time you are at a conference and you hear someone say VIX is mean reverting, boldly step up to the mic and correct them. You now know the real story.
This article was written by Reid Steadman, managing director, non-equity indices, S&P Dow Jones Indices.
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