OPTIONSMART MORNING UPDATE: Unable to hold early gains

1. OUTLOOK: The Nasdaq was even able to log a fresh 52-week high. However, broader market support faded in the wake of the latest statement from the FOMC. The Fed's statement singled out strength in a few sectors, including housing and consumer spending, and it noted that while the labor market continued to lose ground, the pace was slowing. The Federal Trade Commission said Wednesday it is suing Intel for anticompetitive practices against its rivals. Intel shares ended down 2.1%. QQQQ implied volatility little changed.

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2. FEAR GAUGE: QQQQ implied volatility little changed.  

About Implied Volatility.  Investor fear and greed play a significant role in financial markets. The question is, how can investors measure market sentiment in an emerging market situation? How can they gauge the fear? Volatility is a well-known measure of risk in financial markets. When volatility is low, there is a lack of fear. High volatility, however, suggests a fearful markets. Volatility can be calculated in two ways. Either from historical stock price data or from current option price data. Using the second method results in an implied volatility measure. It is a reflection of fear and greed amongst a wide group of market professionals. It’s not wise to ignore this parameter.

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