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Seth Golden posted an update 6 years, 5 months ago
After the February turmoil, the curve inverted — a tell-tale sign of stress called backwardation — as investors forked over a premium to protect against ongoing volatility. If history is any guide, a shift back to contango means that we could expect the VIX to hover around 14 to 15, according to Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors.
“When we see the curve go back into contango after a long period of backwardation, a period of volatility normalization typically follows,” he said. “The curve un-inverting is a fairly reliable signal.” https://www.bloomberg.com/news/articles/2018-04-19/big-bad-volatility-complex-loses-bite-as-traders-price-in-calm