Beyond the raw level of the VIX, the structure of the volatility complex — that is, the relationship between several volatility indicators — offers a much more reliable signal for distinguishing a simple market tremor from a real storm forming.
This ratio compares 3-month implied volatility to short-term implied volatility:
The MOVE measures the implied volatility of the US bond market. It often precedes stress in equities: when the rates market starts to stir before stock indices move, it's a warning sign worth taking seriously — bonds are often the channel through which financial stress first spreads.
The VVIX measures the implied volatility of the VIX itself. It detects extreme hedging demand: when investors rush to buy options to protect against a sudden move in the VIX, this third layer completes the picture.
None of these indicators is perfect on its own. It's their combination that produces a reliable picture: a VIX rising alone might just be a fleeting reaction to news, while backwardation confirmed by a rising MOVE and an elevated VVIX indicates deeper structural stress, warranting real caution.
Yuka Finance shows the VIX, its term structure, the MOVE and the VVIX, updated continuously, for free.
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