U.S.

Market Volatility Survey

J uly 2014
On Top of t he Market s | Ahead of t he Curve

Note from Anthony Saliba
1
When will volatility return?

As U.S. stock indexes continue to hit new all-time highs in 2014, investment professionals have
asked the question endlessly. The CBOE

Volatility Index (VIX

), considered by many to be the

world's best barometer of investor sentiment and market volatility, is down more than 11% for the
year at the time of this writing. Yes, we have seen occasional spikes, but the downward trend has
quickly resumed each time. Do the bulls still have room to run?

The results of our U.S. Market Volatility Survey reveal an investment community expecting
volatility to rise soon 81% expect a rise by the end of the year but worried that its own members
are being too complacent. In fact, two-thirds (66%) of our respondents say that market participants
are too complacent or much too complacent, not buying the protection that options represent and
the VIX measures.

Market participants are also clear on where they think volatility will come from: a majority (51%) of
those surveyed identified U.S. Federal Reserve policy as the most likely driver of a near-term spike
in volatility, far more than the number who named events in the Middle East (16%) or Ukraine
(14%).

Every day, we hear from our clients on this topic. Whether its the buy-side looking for the best
strategies in a low volatility environment, or sell-side worries as the VIXs fear index remains low,
we stand ready to help our clients with our experience and technologies.

We hope this survey helps you make sense of the current situation and helps quantify feelings that
arent showing up in the VIX yet.
Anthony Saliba
Executive Managing Director, ConvergEx Group
On Top of t he Market s | Ahead of t he Curve

2
U.S. Market Volatility Survey
Please identify the type of company you work for:
Sell-side
Buy-side
Individual/Retail Investor
Service Provider
Other
34%
3%
10%
8%
On Top of t he Market s | Ahead of t he Curve

6%
53%
33%
8%
3
U.S. Market Volatility Survey
Do you believe the CBOE

Volatility Index (VIX

) is an
accurate forecast of short term U.S. stock market volatility?
Not Accurate /
Not At All Accurate
Very Accurate
Accurate
Neutral
On Top of t he Market s | Ahead of t he Curve

4
U.S. Market Volatility Survey
What macro driver is most likely to cause a near term
spike in U.S. Market volatility?
Other
U.S. Central
Bank Policy
Foreign Central
Bank Policy
Events in Ukraine
Events In Middle East
15%
On Top of t he Market s | Ahead of t he Curve

5
U.S. Market Volatility Survey
Do you believe investors in the capital markets are too complacent
at the moment given historically low volatility levels?
16%
50%
23%
9%
2%
On Top of t he Market s | Ahead of t he Curve

6
U.S. Market Volatility Survey
In your opinion, which major capital market is the most
complacent at this time?
50%
25%
9%
6%
3%
7%
On Top of t he Market s | Ahead of t he Curve

7
U.S. Market Volatility Survey
Has the low U.S. Market volatility been good or bad for your
business?
9%
29%
34%
21%
6%
On Top of t he Market s | Ahead of t he Curve

8
U.S. Market Volatility Survey
Has the low U.S. Market volatility been good or bad for your
business?
Bad/Very Bad
Good/Very Good
Sell-side
Buy-side
Sell-side
Buy-side
On Top of t he Market s | Ahead of t he Curve

9
U.S. Market Volatility Survey
What are your estimates for the CBOE VIX Index for September 30th
and December 31st? (on 7/23/14 the Index was @11.60)
On Top of t he Market s | Ahead of t he Curve

10
U.S. Market Volatility Survey
Do you use listed options in your investment strategy?
35%
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ConvergEx Group
1633 Broadway
New York, NY 10019
United States of America

1-800-367-8998
www.convergex.com
Survey Methodology

The ConvergEx Group U.S. Market Volatility Survey was performed by ConvergEx via an online survey of financial industry participants, resulting in 236 respondents. The
survey was conducted from J uly 24 to J uly 28, 2014, and has a margin of error of 10%. Respondents included buy-side firms (asset managers, hedge funds), sell-side firms
(banks, broker-dealers), trading venues, service providers and other financial industry participants.
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