SKEW Index vs VIX Index

Figure 1.  SKEW Index vs SPX Index

In [1], it states that:

Note the recent move lower in skew. Downside protection has become cheaper in terms of volatility (relatively speaking). Are we looking for a similar set up to the one we saw in September? Is Santa still alive?

What's SKEW Index?

The SKEW index is calculated using S&P 500 options that measure tail risk—returns two or more standard deviations from the mean—in S&P 500 returns over the next 30 days. The primary difference between the VIX and the SKEW is that the VIX is based upon implied volatility round the at-the-money (ATM) strike price while the SKEW considers implied volatility of out-of-the-money (OTM) strikes.

SKEW values generally range from 100 to 150 where the higher the rating, the higher the perceived tail risk and chance of a black swan event. A SKEW rating of 100 means the perceived distribution of S&P 500 returns is normal and, therefore, the probability of an outlier return is small. 

Is SKEW Index a Good Indicator of Stock Market Volatility?

In practice, the SKEW index has been a poor indicator of stock market volatility. Financial writer Charlie Bilello observed data from the biggest one-day falls in the S&P 500 and the SKEW Index preceding these falls. "Going back to 1990, none of the worst declines had a SKEW Index in the prior month that was within the top 5% of historical values. So, when actual tail risk was present, SKEW did not predict it," Charlie Bilello said.^[3]

Here are some reasons why the SKEW Index might not be a perfect predictor:

• Limited focus on specific types of volatility: The SKEW Index primarily focuses on tail risk, which are large, unexpected movements. However, major market crashes can sometimes be caused by more gradual and sustained periods of volatility that the SKEW Index might not capture.
• Influence of short-term factors: The SKEW Index is calculated based on options with a 30-day expiration date. This means it reflects market sentiment for the near future, but may not necessarily predict longer-term trends or major events.
• Psychological factors and market irrationality: Market crashes can often be driven by fear, panic, and irrational behavior, which are difficult to quantify and predict using purely technical indicators like the SKEW Index.

Here are some reasons why the SKEW Index might not be a perfect predictor:

• Limited focus on specific types of volatility: The SKEW Index primarily focuses on tail risk, which are large, unexpected movements. However, major market crashes can sometimes be caused by more gradual and sustained periods of volatility that the SKEW Index might not capture.
• Influence of short-term factors: The SKEW Index is calculated based on options with a 30-day expiration date. This means it reflects market sentiment for the near future, but may not necessarily predict longer-term trends or major events.
• Psychological factors and market irrationality: Market crashes can often be driven by fear, panic, and irrational behavior, which are difficult to quantify and predict using purely technical indicators like the SKEW Index.

However, it's important to note that:

• The SKEW Index can still be a valuable tool for gauging overall market sentiment towards tail risk. A significantly high SKEW value might indicate increased investor anxiety and potential for larger-than-expected fluctuations.
• The SKEW Index can be used in conjunction with other technical and fundamental analysis tools to gain a more comprehensive understanding of market conditions and potential risks.

Figure 2.  1 month volatility vs 3 month volatility (Source: Refinitiv)^[1]

What's VIX Index?

The VIX is the first benchmark index introduced by Cboe to measure the market’s expectation of future volatility. Being a forward-looking index, it is constructed using the implied volatilities on S&P 500 index options and represents the market’s expectation of 30-day future volatility of the S&P 500 index, which is considered the leading indicator of the broad U.S. stock market.

The VIX Index is a leading indicator of the market's expectation of future volatility for the S&P 500 over the next 30 days. Calculated using implied volatilities from S&P 500 options, it helps gauge investor sentiment and potential risks.

Higher VIX values generally indicate increased fear and uncertainty, suggesting a greater likelihood of larger price movements in the near future. However, it's important to note that the VIX alone doesn't predict market crashes or guarantee volatility levels.

In absolute terms, VIX values > 30 indicates a greater likelihood of larger fluctuations resulting from increased uncertainty, risk, and investors’ fear. VIX values < 20 generally correspond to stable, stress-free periods in the markets.  

Bear markets live and breathe between 20 and 30, and they will bleed people out between 30 and 50.

Warning:  While VIX can be helpful in understanding market sentiment, investors should always consider other factors and conduct thorough analysis before making investment decisions.

In [1], it utilizes both SKEW and VIX for further interpretation:

When vols started outperforming and skew has come down aggressively as a lot of downside hedges have been offloaded (here and here). Let's see how this plays out from here, but should vols continue to "outperform", markets will calm down and the de-risked vol control players will need to chase stuff again.

where 

• "Vols started outperforming": This refers to an increase in implied volatility (volatility expectations) as measured by VIX.
• "Skew has come down aggressively": This means the difference in implied volatility between out-of-the-money (OTM) and at-the-money (ATM) options has been decreasing. This suggests reduced concern about extreme price movements (either large ups or downs).
• "A lot of downside hedges have been offloaded": This implies that investors have reduced their positions in options used to protect against potential market downturns.
• "De-risked vol control players": This refers to investors or traders managing their exposure to volatility using various strategies.

Figure 3.  The liquidity tides are going out (Source: @McClellanOsc)

Liquidity and VIX

The liquidity and the volatility normally correlate—Figure 4 shows the correlation between liquidity and VIX.  When ​the​ ​Fed ​winds down its​ QE​ ​​program​,​ ​it sucks ​​liquidity​ ​out​ ​of​ ​the​ system.  As reported by Morgan Stanley, it states that:^[4]

Do not underestimate the effects of liquidity withdrawal. The mammoth balance sheet the Fed has built up was a key determinant of liquidity across markets. As balance sheet runoff is put into motion, the withdrawal of liquidity will have profound impacts. Determining how it plays out is far from straightforward and will be determined by a variety of factors. Understanding the details matters. So hold on tight – there’s volatility ahead.

Figure 3.  Correlation between liquidity and VIX—higher​ ​black​ ​line​ ​=​ ​tighter​ ​liquidity​ 
(Source: @Theimmigrant84)

References

1. Skew, gamma, seasonality, low liquidity - say hello to the squeeze (12/21/2021)
2. What Is the SKEW Index?
3. Talk Markets. "The Risk of a Crash Has Never Been Higher
4. Morgan Stanley: As The Fed's Balance Sheet Runoff Begins, The Withdrawal Of Liquidity Will Have Profound Impacts (ZeroHedge)

Santa Claus Rally and January Effect

Santa Claus Rally 

A Santa Claus rally is a jump in stock prices, observed in the final five trading days of the year, typically starting a day after Christmas and going into the first two of January. Historically, this seven-day period has brought good news for investors, giving them another reason to cheer during the holiday season.^[1]

Why is that, you might ask? Here are some thoughts:^[3]

Some suspect that the Santa Claus rally is a result of general feelings of investor optimism around the holidays. Others point to the fact that many institutional investors, who tend to be more pessimistic about the markets, go on vacation around the holidays and leave the market to retail investors who are often more bullish.

Other explanations include the investing of holiday bonuses, lower trading volumes around the holiday season, end-of-year tax considerations for institutions and holiday consumer spending boosting sales. Moreover, some say that the Santa Claus rally is a result of people buying stocks in anticipation of a rise of prices in January – a phenomenon known as the January Effect.

No matter the reason, this seven-day trading period is the second-best stretch for equities at any point in the year, with an average 1.3% gain since 1950.^[4] Moreover, the seven-day combo produced positive returns nearly 78% of the time.^[4]

January Effect

Figure 1.  January typically sees 134% of inflows (the rest of year average is 34%; Source: GS).^[2]

Figure 2.  Seasonality based on the average of 1985-2019 (excluding 2008; Source: GS).^[2]

Figure 3.  S&P 500 Index Seasonality (Source: Equity Clock).^[2]

Relationship Between Liquidity, Volatility, and Technical Analysis

Based on his long-term experience, Justin Bennett warned that:^[6,7]

• Liquidity affects technical analysis
• The more liquid a market is, the more reliable the technical is likely to be.
• The decrease in liquidity around the month of December means that technical patterns become less effective. Markets also become prone to false breakouts.
• The same can apply to Fridays when volume is lighter. If a market does break a key level just before the weekend, you may want to think twice before trading it on Monday.
• Volatility can also affect the reliability of your analysis
• You want to be careful when using a candle’s high or low that was the result of an extremely volatile session. Chances are the price will vary between brokers, making it an undesirable candle to use as part of your analysis.

References

1. Jeffrey A. Hirsch. “The Little Book of Stock Market Cycles.” Page 170. John Wiley & Sons, 2012. Accessed Dec. 10, 2021.
2. Skew, gamma, seasonality, low liquidity - say hello to the squeeze
3. What is the Santa Claus rally?
4. LPL Research, “Do You Believe In The Santa Claus Rally?” (December 2020)
5. Chart Advisor: Santa Claus Rally
6. How Are Market Liquidity and Volatility Related?
7. How Volatility Can Sabotage Your Technical Analysis

Goldman Sachs Hedge Fund Concentration Index (GSTHHVIP and GSTHVISP)

In an article named 

Time to chase laggards?

published on zerohedge.com website on 12/19/2021.  It asks a good question whether it's time to chase the laggards in the stock markets now.  One of laggards (i.e., it has performed very poorly lately) mentioned in the article is:

hedge fund concentration (i.e., GSTHHVIP and GSTHVISP)

Note that if a stock is on the "VIP" list, it means that a lot of hedge funds own it and if a stock on the "Most shorted" list, it means that a lot of hedgies hate it.

Figure 1.  GSTHHVIP vs GSTHVISP (Source: Goldman Sachs)

Goldman Sachs Hedge Fund VIP Index

In [1], it describes the methodology for the Goldman Sachs Hedge Fund VIP Index:

The Goldman Sachs Hedge Fund VIP Index (the “Index”) is owned by Goldman Sachs Asset Management L.P. (the “Index Sponsor”).  The Index is calculated by Solactive AG (the “Calculation Agent”). 

The Index consists of hedge fund managers’ “Very-Important-Positions,” or the US-listed stocks whose performance is expected to influence the long portfolios of hedge funds. Those stocks are defined as the positions that appear most frequently among the top 10 long equity holdings within the portfolios of fundamentally-driven hedge fund managers. 

The Index is rebalanced on a quarterly basis to reflect changes in reported hedge fund manager holdings.

You can read a tutorial on Goldman Sack's Financial Series to learn how to interact with financial data series. It'll walk through some examples of how to retrieve and visualize market data in order to analyze the performance of different assets.

Goldman Sachs Very Important Short Positions For Hedge Fund

Reported on 01/28/2021 by Barron's, it describes GSTHVISP as the below:

Goldman Sachs publishes a report that looks at the holdings of 814 hedge funds with $2.4 trillion of gross equity positions. 

As of the start of the fourth quarter 2020, the most recent report available, 10 of the stocks Goldman calls “very important short positions” for hedge funds with the highest short interest included: 

1. C.H. Robinson Worldwide (CHRW)  
2. Advanced Micro Devices (AMD)
3. Aon (AON)
4. Duke Energy (DUK)
5. Analog Devices (ADI)
6. Kroger (KR)
7. Simon Property (SPG)
8. Hormel Foods (HRL)
9. Willis Towers Watson (WLTW)
10. Chipotle Mexican Grille (CMG).

Note that high short interest is, essentially, a high percentage of total shares available for trading borrowed and sold by bearish investors betting on price declines. It can exacerbate a stock’s price rise in a short squeeze because investors like hedge funds, who for the most part are active short sellers, have to buy more shares to cover bets as losses mount.

 

References

1. Goldman Sachs Hedge Fund VIP Index Methodology
2. Time to chase laggards? (zerohedge.com)
3. Goldman Sachs Hedge Fund VIP Index TR
4. 10 Popular Hedge Fund Shorts That Could Get Squeezed Next

What If Your Car Inspection Failed with OBD-II "Not Ready"?

During pandemic, you may not drive your car as frequently as you normally does and you may fail the OBD-II inspection with "Not Ready" status (i.e., your inspection failed).

In this article, we will cover two topics:

• What is OBD-II monitor readiness?
• How to pass the OB-II inspection?

What is OBD-II monitor readiness?

On 1996 and newer model year vehicles, the on board diagnostic system (OBD-II) performs up to eleven diagnostic checks of vehicle emission control systems. These checks are performed in the background during normal driving and are designed not to interfere with vehicle performance or safety.

If a fault is detected, the powertrain control module (PCM – The computer) illuminates the malfunction indicator light (MIL – Check Engine – Service Vehicle Soon).

If the PCM loses power for any reason (Including a disconnected or depleted battery), or if diagnostic trouble codes are cleared using a diagnostic scan tool, readiness monitors will indicate an incomplete, or not ready, status.

If your vehicle recently needed a jumpstart or you replaced the battery, wait at least a week before taking the smog test. Whenever a car's computer loses power, it erases the internal self-test monitors, including the emission monitor that's required to pass a smog check.

How to Pass the OBD-II Inspection?

In most cases, a vehicle with incomplete readiness monitors will not pass the State Vehicle Inspection (See [1]).  However, don't panic yet because you can correct the issue with a simple solution:

Driving the vehicle under conditions that meet the monitor enabling criteria should complete most OBD-II monitors. This is usually accomplished after fifty to one-hundred miles of normal driving.

For example, I have sent my car for the  State Vehicle Inspection.  However, it failed with OBD-II monitor not ready status, which means that my car inspection failed.

The simple reason is that I have driven my car only once in the past week before sending it for the vehicle inspection.  To correct the issue, what I need to do is just driving my car for over 50 miles before sending it immediately for the inspection.

References

1. New Readiness Monitor Standards For OBD-II Functional Inspection

Lord Forgive Me When I Whine

Today, upon a bus,

I saw a very beautiful woman

and wished I were as beautiful.

When suddenly she rose to leave,

I saw her hobble down the aisle.

She had one leg and used a crutch.

But as she passed, she passed a smile.

Oh, God, forgive me when I whine.

I have two legs; the world is mine.

I stopped to buy some candy.

The lad who sold it had such charm.

I talked with him, he seemed so glad.

If I were late, it'd do no harm.

And as I left, he said to me,

"I thank you, you've been so kind.

 It's nice to talk with folks like you.

 You see," he said, "I'm blind."

 Oh, God, forgive me when I whine.

 I have two eyes; the world is mine.

Later while walking down the street,

I saw a child I knew.

He stood and watched the others play,

but he did not know what to do.

I stopped a moment and then I said,

Why don't you join them dear?"

He looked ahead without a word.

I forgot, he couldn't hear.

Oh, God, forgive me when I whine.

I have two ears; the world is mine.

With feet to take me where I'd go..

With eyes to see the sunset's glow.

With ears to hear what I'd know.

Oh, God, forgive me when I whine.

I've been blessed indeed, the world is mine.

Author Unknown

Social Security — Your Payments while You Are outside the United States

You can read the below publication on ssa.gov for full details:

Your Payments While You Are Outside the United States

In this article, we will try to highlight important bullets for you. 

• Being outside the United States may affect your Social Security payments
• The information you need to report to SSA, and how to report it

How to Contact Social Security Administration

If you have questions, you can:

• For general Information 
• visit SSA website at www.ssa.gov
• For specific question
• Call toll-free at 800-772-1213 from 8 a.m. to 7 p.m., Mon through Fri.
• Call TTY number, 800-325-0778 if you are deaf or hard of hearing
• Write or visit any Social Security office.
• If you plan to visit an office, you may call ahead to make an appointment.

Finally, you may also write the Social Security Administration at:

P.O. Box 17775

Baltimore, Maryland, 21235-7775 

USA

If you live outside the United States, you can contact the nearest Federal Benefits Units.

 

Office of Earnings & International Operations (OEIO)

Office of Earnings & International Operations (OEIO) is responsible for administering the Social Security program outside the U.S. and for the implementation of the benefit provisions of international agreements.  

Since SSA has no offices outside the U.S., OEIO is assisted by the Department of State's embassies and consulates throughout the world.

Federal Benefits Unit (FBU)

If you live outside the United States, you can contact nearest Federal Benefits Unit (FBU) for any information.  

For example, if you are in Canada, visit:

www.ssa.gov/foreign/canada.htm

to find the office that services your area.  

Outside the United States

If you’re a U.S. citizen, you may receive your Social Security payments outside the United States as long as you are eligible.  

Once you’ve been outside the United States for at least 30 days in a row, we consider you to be outside the country.

You can use this online tool to find out if you can continue to receive your Social Security benefits if you are outside the United States or are planning to go outside the United States at 

www.socialsecurity.gov/international/payments_outsideUS.html

If you are outside the United States, see the contact list:

Contacts for Services outside the U.S.

References

1. Canadian Service Area Directory
2. Foreign Country Service Information
3. Your Payments While You Are Outside the United States (pdf)
4. Social Security Publications (total: 152 on 10/03/2021)
5. Social Security Benefits U.S. Citizens Outside the United States (SSI)
6. Payments Outside the United States (important)
7. Office Of Earnings & International Operations (OEIO)

Online Medicare Application during Pandemic

When Can You Enroll in Medicare?

Starting at age 65, you can enroll in Medicare.^[1] You no longer have to rely on employer-sponsored or private health insurance plans. There are 2 main ways to get your Medicare coverage:

1. Original Medicare (Part A and/or Part B)
2. Medicare Advantage Plan (Part C)

Please read a companion article for more details.

Before you make a decision, you can get local, personalized Medicare counseling from the State Health Insurance Assistance Program (SHIP).  

You can apply for Medicare online by visiting the Medicare section of the Social Security website.  Note that you can apply Medicare online even if you are NOT ready to retire—read Publication No. 05-10043  and the below article:

     Deciding Whether to Enroll in Medicare Part A and Part B When You Turn 65

You need to register for Medicare benefits during a seven-month window, including the three months before your 65th birthday, to avoid paying higher premiums for coverage. 

Monitoring the Progress Online

After you log in your Social Security Account, select "my Social Security".  Then you can find "Your Benefit Applications" status at the bottom of the page (see Figure 1).

Figure 1.  Progress of your benefit applications

 

Receiving the Application Summary via Mail 

After your application was approved online, you should expect receiving a mail from Social Security Administration.  In it, you can find the summary of your application.

What you need to do next?

• Review the summary to make sure SSA recorded your statements correctly.
• If you agree with all your statements, you may keep the information for your records.
• If you disagree with any of your statements, please contact SSA within 10 days after receiving your notice to let them know.

During Pandemic

In the application summary, you can find the below statement:

I understand that I am being paid benefits under the COVID-19 Pandemic Disaster Procedures.  Therefore, when the Social Security Administration returns to normal business and reopens, I am required to submit my proof of age and lawful presence __________.

Changes to Be Reported

There are some changes you need to report to Medicare.  Failure to report may result in overpayments that must be repaid, and in possible monetary penalties:

• You change your mailing address for checks or residence.  To avoid delay in receipt of checks you should ALSO file a regular change of address notice with your post office.
• Your citizenship or immigration status changes.
• You go outside the USA for 30 consecutive days or longer.
• Any beneficiary dies or becomes unable to handle benefits.
• You are confined to jail, prison, penal institution or correctional facility for conviction of a crime or you are confined to a public institution by court order in connection with a crime.
• You have an unsatisfied warrant for your arrest for a crime or attempted crime that is a felony (or, in jurisdictions that do not define crimes as felonies, a crime that is punishable by death or imprisonment for a term exceeding 1 year).
• You have an unsatisfied warrant for a violation of probation or parole under Federal or State law.
• Your stepchild is entitled to benefits on your record and you and the stepchild's parent divorce.  Stepchild benefits are not payable beginning with the month after the month the divorce becomes final.
• Custody Change - Report if a person for whom you are filing, or who is in your care dies, leaves your care or custody, or changes address.
• Change of Marital Status - Marriage, divorce, annulment of marriage.
• You become entitled to a pension or annuity based on your employment after 1956 not covered by Social Security, or if such pension or annuity stops.

How to Report?

You can make your reports by telephone, mail, or in person, whichever you prefer.

If you are awarded benefits, and one or more of the above change(s) occur, you should report by:

• Calling SSA TOLL FREE at 1-800-772-1213;
• If you are deaf or hearing impaired, calling SSA TOLL FREE at TTY 1-800-325-0778; or
• Calling, visiting or writing your local Social Security Office at the phone number and address above.

For general information about Social Security, visit website at www.socialsecurity.gov.

How do I report a change of name or address to Medicare?

You can view or update your contact information (e.g. change your address) of record via the My Profile Tab on my Social Security, even if you do not receive Social Security benefits. In addition, you can decide when your change of address will take effect. Changing your address on line is the fastest way to get assistance.

You may also report a change of name or address for the Medicare program by calling the Social Security Administration at 1-800-772-1213 or by visiting your local field office. Addresses and directions to the Social Security field offices may be obtained from the Social Security Office Locator. See the Contacts page for additional information on contacting the Social Security Administration.

You can also get more information on changing your name on the Social Security's web site.

Related Questions

1. How do I get a new Medicare card if my card is lost, stolen, or damaged? How do I change my contact information?
2. Where can I find a doctor that accepts Medicare and Medicaid?
3. How do HRA, HSA and FSA differ when you’re eligible for Medicare?

What to Invest if Reserve Currency Status Shift Happens

What to Invest if Shift Happens?

If the dollar loses its status as the reserve currency, it would be a major shift in the global economy the likes of which only happens once or twice a century. What happens then is anybody’s guess. 

Here are some assets to be considered if such event of shifting away from the dollar happens:

• Foreign real estate
• Physical Gold or Silver
• Investing in foreign currencies by buying good stocks in stable countries like Switzerland 

Video.  Value of crypto universe tops U.S. dollar supply (YouTube link)

References

1. Currency Strategy: An Overview Of Currency Trading History And Practical Strategy

Can you carry laptop on your flight?

When you buy a new laptop, your lithium battery might be shipped in a plastic bag with UN 3480 label on it (see Figure 1).  What does it mean?  Can you carry your laptop (lithium battery included) on your flight?

Figure 1.  UN 3480, Lithium ion batteries (shipped by themselves)

Types of Lithium Batteries

Lithium batteries are dangerous goods and, as such, require special packaging for transportation.

All domestic and international shipments containing lithium batteries are subject to transport regulations on hazardous goods according to ADR (truck)/RID (rail), ADN, IMDG, ICAO / IATA Regulations.

Lithium batteries are basically distinguished as:^[2]

• Lithium metal batteries 
• In general are non rechargable and contain metallic lithium. 
• Lithium ion batteries
• Don´t contain metallic anymore, but a lithium compound (lithium oxide) and they are rechargable. Often they are called accumulators.

What's UN 3480?

The United Nations (UN) have developed a classification system for dangerous goods. They will be assigned to classes according to their dangerous properties. Another order scheme are the UN numbers, i.e. each dangerous goods must be assigned to a four-digit number, the so called UN number. 

If a new laptop is shipped to you, your new standalone lithium battery needs to be labeled with UN 3480 following the following packaging regulations:

• Batteries must be placed in inner packaging that completely enclose the battery, batteries must be protected so as to prevent short circuits.
• 30 kg gross weight per packaging
• Strong outer packaging, e.g., fiberboard box (drop test passed: content shall not be damaged or shifted)

For lithium batteries at first you have the following UN numbers:^[2]

UN 3090	LITHIUM METAL BATTERIES (including lithium alloy batteries)
UN 3091	LITHIUM METAL BATTERIES CONTAINED IN EQUIPMENT (including lithium alloy batteries)
UN 3091	LITHIUM METAL BATTERIES PACKED WITH EQUIPMENT (including lithium alloy batteries)
UN 3480	LITHIUM ION BATTERIES (including lithium polymer batteries)
UN 3481	LITHIUM ION BATTERIES CONTAINED IN EQUIPMENT (including lithium polymer batteries)
UN 3481	LITHIUM ION BATTERIES PACKED WITH EQUIPMENT (including lithium polymer batteries)

Additionally there is for vehicles the UN number UN 3171 (for electrically powered vehicles only) and UN 3166 for hybrid vehicles.

Can you carry laptop on your flight?

The short answer is:^[3]

Passengers may carry their battery-powered devices (incl. laptop) and spare batteries in their carry-on bags. 

The simple reason for doing this is to protect your own safety by preventing the short circuit of lithium batteries during your flight.  When lithium batteries fail to operate safely or are damaged, they may present a fire and/or explosion hazard.^[4]

References

1. How to ship lithium batteries by air—in 2020 and beyond
2. Lithium Battery Service (FAQ)
3. Can I bring my laptop on my flight? And other tips for traveling with tech
4. Preventing Fire and/or Explosion Injury from Small and Wearable Lithium Battery Powered Devices
5. Flying with batteries and electronics restrictions

USB — Knowing the Basics of Universal Serial Bus

Universal Serial Bus (USB) is an industry standard that establishes specifications for cables and connectors and protocols for connection, communication and power supply (interfacing) between computers, peripherals and other computers. A broad variety of USB hardware exists, including eleven different connectors, of which USB-C is the most recent.

Figure 1.  Lenovo T495

Figure 2.  Lenovo ports layout

Always On USB 3.1 connector (Figure 2.9)

• There is a feature called "Always On USB" which allows devices connected to the laptop via USB to be powered over USB even when the Operating system (Windows 10 in my case) shuts down.

USB 2 and USB 3 Compatibility

• USB 3.0 backwards is compatible—meaning it's designed to work with older USB versions including USB 2.0 and USB 1.1. 
• You can plug a USB 2.0 device into a USB 3.0 port and it will always work, but it will only run at the speed of the USB 2.0 technology.
• USB 3.0 Flash Drives and card readers are backwards compatible with USB 2.0 and USB 1.1 ports. The USB 3.0 Flash Drive or card reader will work at the speed of the port, for example if you use a USB 3.0 Flash Drive in your USB 2.0 laptop, it will work at USB 2.0 speed.

USB Type C vs USB 3.1 Gen 2

• The USB Type C standard defines only the physical connector while the USB 3.1 Gen 2 standard applies only to the electrical signal. 
• USB 3.1 connector Gen 2 (Figure 2.18)
• Also referred to as SuperSpeed+
• USB-C connectors (USB 3.1 Gen2; Figure 2.20)
• USB-C is an industry-standard connector for transmitting both data and power on a single cable.
• The physical USB-C connector isn’t backwards compatible, but the underlying USB standard (could be USB 2.0 or 3.0) is.
• But that doesn’t mean you have to discard all your old peripherals. USB 3.1 is still backwards-compatible with older versions of USB, so you just need a physical adapter with a USB-C connector on one end and a larger, older-style USB port on the other end. 
• The USB-C connector looks similar to a micro USB connector at first glance, though it's more oval in shape and slightly thicker to accommodate its best feature: flippability. Like Lightning and MagSafe, the USB-C connector has no up or down orientation.
• Even if you get a computer with only USB Type-C ports, like Apple’s new MacBook, adapters and hubs will fill the gap.

Figure 3. USB Standards^[1]

USB Connectors

Sizes

• default—standard format intended for desktop or portable equipment
• mini—intended for mobile equipment
• micro—intended for low-profile mobile equipment such as mobile phones and tablets

Speeds (Figure 3)

• USB 2.0—Low, Full, High Speed
• USB 3.1 Gen 1—SuperSpeed (or SS in Figure 3)
• USB 3.1 Gen 2—SuperSpeed+ (or SS+ in Figure 3)

Shape (Figure 4)

• Type-A
• Type-B
• Micro-B
• Type-C

Figure 5.  USB Shapes

Figure 6. USB Plug Types (SS: SuperSpeed)

Figure 7. USB port symbols

References

1. USB Type C and USB 3.1 Gen 2 – Clarifying the Connection
2. USB Hardware (Wikipedia)
3. What Is USB-C? An Explainer
4. USB Implementers Forum (USB-IF)
5. Levnovo USB-C Laptop Power Bank 14000 mAh
• Power delivery (PD) is lower than 65w
6. The Best USB and USB-C Hubs
7. USB Type-C Explained: What is USB-C and Why You’ll Want it
• The USB PD specification supported by USB-C ups this power delivery to 100 watts. 
• It’s bi-directional, so a device can either send or receive power. And this power can be transferred at the same time the device is transmitting data across the connection. 
• This kind of power delivery could even let you charge a laptop, which usually requires up to about 60 watts.
8. USB Power Delivery 2.0 vs 3.0
• USB PD 3.0 ensures backwards compatibility with USB PD 2.0. All USB PD 3.0 sources and sinks are required to fully interoperate with USB PD 2.0 sources and sinks. This requirement is enforced by requiring all USB PD 3.0 devices to pass USB PD 2.0 compliance tests. In fact, from the USB Implementers Forum (IF) point of view, there are only USB PD products. The USB-IF does not distinguish between USB PD 2.0 products and USB PD 3.0 products when issuing USB logo certification.
9. Lenovo T495 Hardware Maintenance Manual
10. ThinkPad T495 Spec (pdf)
• Standard Ports
• 1x USB 3.1 Gen 1 (Always On)
• 1x USB 3.1 Gen 2
• 2x USB-C 3.1 Gen 2 (support data, PD and DP 1.4)
11. ThinkPad T495 User Guide (pdf)
• USB-C connectors (USB 3.1 Gen2)
• Charge your computer.
• Charge USB-C compatible devices with the output voltage and current of 5 V and 1.5 A.
• Transfer data at USB 3.1 speed, up to 10 Gbps.
• Connect to an external display:
• USB-C to VGA: 1900 x 1200 pixels, 60 Hz
• USB-C to DP: 3840 x 2160 pixels, 60 Hz
• Connect to USB-C accessories to help expand your computer functionality. To purchase USB-C accessories, go to https://www.lenovo.com/accessories.
• Supply power to another computer using P-to-P (Peer to Peer) 2.0 charging function. See “Use P-to-P 2.0 charging function” on page 25.