RW: When I’m not teaching, I keep the news on in the background, so I know what’s going on. And I know the effect it might have on volatility, or I know the effect it might have on crude oil prices. But I’m day trading. People hold these things for multiple days. And they don’t know what they’re doing.

JA: It seems like there’s plenty to fear these days. Is there anything in particular that worries you?

RW: The VIX itself gives me assurance from day to day. What I do, given that the markets trade overnight, I look at the VIX futures before markets open here. And I’m comforted by the fact that smart institutional money, the people trading VIX futures, is telling me the price of insurance a month from now is going to be considerably less than it is now. The people setting the prices of those VIX futures contracts are telling me that, in their best judgment, things are going to get better. And that gives me a good deal of assurance, to be quite frank.

This article was provided by Bloomberg News.

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