V.18:5 (54-57):Has Volatility Lost Its Edge? by Mark G. Levey

V.18:5 (54-57):Has Volatility Lost Its Edge? by Mark G. Levey
Item# \V18\C05\043VOL.PDF
Availability: In Stock

Product Description

Has Volatility Lost Its Edge?

by Mark G.Levey

Does volatility still offer the same advantage it once did in trading the Standard &PoorÕs 500 index? HereÕs a followup to previous STOCKS & COMMODITIES articles.

From a statistical standpoint, assuming an even chance of loss or gain on an investment, low-volatility investments offer significantly higher returns than do high-volatility strategies. A low-volatility trading system beats a high-volatility system 70% to 80% of the time when given the same sequence of trading results. In winning systems, however, game theory shows that once the probability of winning exceeds 56%, high-volatility strategies prevail.

In reality, markets do not operate strictly according to random walk theory. Since World War II, average values of stocks and bonds have appreciated overall, making the outcome of long trades over time a better than even bet. In the December 1998 STOCKS & COMMODITIES, Dick Stoken reviewed the outcomes of five trading strategies for assets of varying volatility during the period encompassing 1952 Š94.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order