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Stock Market Volatility Tops Financial Crisis With VIX at Record

Luke Kawa

(Bloomberg) -- Volatility in U.S. stocks surged to a record after benchmark indexes suffered the biggest rout since 1987.

The Cboe Volatility Index ended Monday at 82.69 as the S&P 500 Index tumbled 12%. The fear gauge’s prior closing high was 80.86 on Nov. 20, 2008, when lawmakers postponed a vote on a plan to save the auto industry. The gauge’s rose as high as 83.56 during the session, short of its intraday record of 89.53 reached on Oct. 24, 2008.

“In 2008, you pretty much knew it was banking system breaking down, but didn’t know exactly how, and now it’s everything breaking down and how that spills over,” said Steve Sosnick, chief strategist at Interactive Brokers. “The latter is worse, I’d argue -- this is dislocating everything.”

The VIX Index measures the 30-day implied volatility of the S&P 500 Index based on out-of-the-money options prices. The current level implies daily swings of more than 5% are in the offing for the benchmark equity gauge, which is lower than what’s been realized over the past 10 sessions.

To contact the reporter on this story: Luke Kawa in New York at lkawa@bloomberg.net

To contact the editor responsible for this story: Jeremy Herron at jherron8@bloomberg.net

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