ECONOMY: Derivatives gone crazy
NSE India has released a press circular (warning: PDF link) of disseminating VIX.
Nifty is a derivative of the 50 most capitalized companies in India.
VIX is a derivative of Nifty, volatility as measured by puts/calls ratio on Nifty.
And now you would have Futures & Options on VIX.
Welcome to bizarroland.
Derivatives on derivatives on derivatives.
Somebody should stop this nonsense.
Note that the Nifty components can be changed when companies under-perform to maintain the valuation.
Nifty is a derivative of the 50 most capitalized companies in India.
VIX is a derivative of Nifty, volatility as measured by puts/calls ratio on Nifty.
And now you would have Futures & Options on VIX.
Welcome to bizarroland.
Derivatives on derivatives on derivatives.
Somebody should stop this nonsense.
Note that the Nifty components can be changed when companies under-perform to maintain the valuation.
posted by Amit Kulkarni at 7/22/2010 02:03:00 PM
0 Comments:
Post a Comment
Links to this post:
Create a Link
<< Home