1% moves are boring?!

On a call yesterday a client told me the market was “boring” because it had only moved about 1% across most of the complex.

This is a sign of the times. Unless we see violent moves in either direction, people start to lose interest.

But it should also serve as a warning.

After periods of extreme volatility, markets often slip into a false sense of calm. Maybe we really are entering a quieter phase. Or maybe we’re just in the eye of the storm.

This is when discipline starts to fade:
• Stops get a little wider
• Orders feel less urgent
• Risk reviews get pushed back a day or two

But that is a dangerous approach.

Volatility has a habit of snapping back in violent fashion, and if you’re not prepared it can burn you very quickly.

Don’t get complacent. Make sure positions sit where they should, and maybe pay a visit to the finance department. It’s always nicer to chat when they’re not trying to put out margin call fires.