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Matthias Knab, Opalesque:

Janus Henderson Investors writes on Harvest Exchange:

The S&P 500 index reached its pre-financial crisis high the same week that the Kardashians debuted on TV. Both then had an unexpected tail event - the market crashed while the show was an astonishing success.

Three month S&P 500 straddle prices imply that the S&P 500 index is expected to move less than 3.6% over the next three months, in either direction. This is a forecast that the range of future outcomes will be much smaller than in the past.

Ten years ago, the Kardashians came into our lives. No one could have predicted that documenting the daily life of an unknown family would be a breakout hit creating worldwide fame and fortune. Coincidentally (or not) the S&P 500 Index reached its pre-financial crisis high the very same week in October 2007 that the Kardashians debuted on TV.

The subsequent global market collapse was the exact opposite of triumph. Both the Kardashians' success and the market's failure were fat-tailed events well beyond normal expectations. Hollywood and Wall Street soon adapted to a new reality - anyone could become a star, and no asset was safe. It's hard to infer expectations in entertainment, but option prices provide a measure for financial markets. If you expect a large move, but don't want to bet on direction, you can purchase an at-the-money (AT......................

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