A rising MVX implies
A) a relatively stable stock market
B) investors having heightened fears for the future
C) the options traded on the Montreal Exchange are in-the-money
D) no risk of market turmoil
E) the options traded on the Montreal Exchange are out-of-the-money

Question

Quizplus · Accepted Answer

MVX is the Montreal Exchange Volatility Index, which measures the implied volatility of option prices on the Montreal Exchange. A rising MVX indicates that investors are willing to pay more for options to protect their investments, meaning they are anticipating increased market fluctuations and heightened fears for the future. Therefore, option prices are likely to be higher, and investors are willing to pay more for the protection options provide.

A Rising MVX Implies