Gateway market perspective

Market volatility experts from Gateway Investment Advisers, specialists in options-based investment strategies, examine key volatility trends each month and risk management ideas to help investors stay invested for the long run.

November 2024 highlights:

• The current environment of double-digit volatility levels and positive interest rates has been additive to S&P 500^® Index option writing strategies. 
• Ongoing drivers of volatility, such as divergence in global monetary policy and armed conflict, may support a persistent shift higher in volatility compared to the prior decade.
• In the current decade, from January 2020 to October 2024, the VIX^® has averaged 21.59. The VIX^® average since 1990 is 19.48.
• Also, positive interest rates can support greater cash flow generation potential. This is in stark contrast to the extended, zero-interest-rate policy that was in place after the Global Financial Crisis.
• When the VIX^® is above its long-term average of 19.65, the median upside capture ratio for the Cboe^® S&P 500 BuyWrite^SM Index (BXMSM) climbs to 80%, well above the 64% upside capture experienced when implied volatility (the VIX^®) is below its long-term average.