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Trade like the pros: How investors are changing their strategy amid the extreme market volatility

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 20, 2020.

Lucas Jackson | Reuters

The year is only halfway through but the amount of volatility already experienced so far in 2020 is rivaled only by the wild swings during the financial crisis more than a decade ago. 

The S&P 500 posted 26 daily moves this year of at least 3%, including four swings of more than 9%. That’s the highest number of 3%-plus moves for the broader-market index since 2008, when it recorded 42 of them. The Cboe Volatility Index — considered the best fear gauge on Wall Street — closed at a record of 82.69 on March 16, topping the previous high of 80.86 set in 2008.

These wild swings have kept traders and investors on their toes throughout 2020 and, in some cases, they have forced changes to their strategy and market approach. 

Here’s a look at how professionals have adapted to the new volatility regime.

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