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Implied Volatility: Utilities versus Broader Markets

Vincent Kruger
Implied Volatility: Utilities versus Broader Markets

On August 24, the Utilities Select Sector SPDR ETF (XLU) had an implied volatility of 11%—marginally lower than its 15-day average. The SPDR S&P 500’s implied volatility was 8%. The implied volatility shows investors’ anxiety. Higher volatility is usually related to a fall in a stock’s price.