DEFINITION of 'VolDex® Implied Volatility Indexes '
A measure of option cost and implied volatility. The VolDex® Implied Volatility Indexes generally refers to the Large Cap VolDex and is a measure of expectations for market volatility over the next 30 days as expressed by options on the SPDR S&P 500 ETF, which are the most liquid options in the world. The VolDex index is one of a family of implied volatility indexes developed by NationsShares, an independent developer of optionbased indexes. Nations claims that its VolDex indexes are a superior and investable measure of option cost and implied volatility because they measure the cost of options in the same way that options users do, by using a limited number of atthemoney options.
BREAKING DOWN 'VolDex® Implied Volatility Indexes '
According to NationsShares, its Large Cap VolDex has a number of advantages over the CBOE Volatility index (the “VIX”), which is the most widely followed measure of market volatility, which include the following –
 The VolDex focuses on atthemoney options, which are generally the most liquid and provide the clearest indication of market expectations for volatility. The VIX, on the other hand, uses a variable number of options that can number as many as 200 and that change by the second; many of these options are deep outofthemoney options that are rarely used by market participants to hedge risk.
 The underlying security for the Large Cap VolDex is the SPDR S&P 500 ETF, which is extremely liquid, as are the options on it. The VIX uses options on the S&P 500 index itself, which are much less liquid and have very wide bid/ask spreads.
 NationsShares says that the VIX has misleading statistical noise created by the distance between strike prices, the number of strike prices listed, the frequent change in the number of constituent options, and option skew. It also consistently overstates implied volatility. NationsShares claims the VolDex provides a more robust and accurate measure of implied volatility because it removes noise generated by options skew.
 Overall, NationsShares notes that its VolDex indexes provide a clearer measure of expectations for nearterm volatility because they use a fewer, fixed number of very liquid atthemoney options. The limited number of inputs compared with the VIX also substantially improves the investability of the VolDex.

Implied Volatility  IV
The estimated volatility of a security's price. 
VIX  CBOE Volatility Index
The ticker symbol for the Chicago Board Options Exchange (CBOE) ... 
VIX Option
A type of nonequity option that uses the CBOE Volatility Index ... 
Volatility Arbitrage
Trading strategies that attempt to exploit differences between ... 
Volatility Skew
The difference in implied volatility (IV) between outofthemoney, ... 
Volatility Smile
A ushaped pattern that develops when an option’s implied volatility ...

Trading
Implied Volatility: Buy Low And Sell High
This value is an essential ingredient in the option pricing recipe. 
Investing
What is Meant by Implied Volatility?
The estimated volatility of a security's price. 
Investing
Implied vs. Historical Volatility: The Main Differences
Discover the differences between historical and implied volatility, and how the two metrics can determine whether options sellers or buyers have the advantage. 
Markets
How to Make Money by Trading Index Options
Index options are less volatile and more liquid than regular options. Understand how to trade index options with this simple introduction. 
Trading
How To Profit From Volatility
We explain four key strategies to profit fom volatility in markets. 
Trading
Understanding the CBOE Volatility Index
The VIX shows the market’s volatility expectations for the next 30 days. 
Trading
The Anatomy of Options
Find out how you can use the "Greeks" to guide your options trading strategy and help balance your portfolio. 
Markets
The Volatility Index: Reading Market Sentiment
Using the Volatility Index can be essential for investing success. 
Trading
Introducing The VIX Options
Discover a new financial instrument that provides great opportunities for both hedging and speculation. 
Investing
Options Trading: How Implied Volatility Affects Calendar Spread
Even if the risk curves for a calendar spread look enticing, a trader needs to assess implied volatility for the options on the underlying security.

How does implied volatility impact the pricing of options?
Learn about two specific volatility types associated with options and how implied volatility can impact the pricing of options. Read Answer >> 
What is the relationship between implied volatility and the volatility skew?
Learn what the relationship is between implied volatility and the volatility skew, and see how implied volatility impacts ... Read Answer >> 
What is an option's implied volatility and how is it calculated?
Learn what implied volatility is, how it is calculated using the BlackScholes option pricing model and how to use a simple ... Read Answer >> 
Can delta be used to calculate price volatility of an option?
Learn how implied volatility is an output of the BlackScholes option pricing formula, and learn about that option formula's ... Read Answer >> 
How is implied volatility for options impacted by a bearish market?
Learn why implied volatility for option prices increases during bear markets, and learn about the different models for pricing ... Read Answer >> 
What is the CBOE Volatility Index? (VIX)
Find out why investors and analysts use the Chicago Board Options Exchange Volatility Index, or VIX, to measure the market's ... Read Answer >>