Market Volatility Options / VIX

The rate of change in prices is known as volatility. Active traders in many cases need both volatility in prices and changes in volatility of prices to realize profits. Investors can also speculate on market volatility by trading VIX options. VIX options measure the market volatility of the S & P 500 (SPX) by calculation the spread between the bid and ask of S & P 500 index options. The VIX calculation uses the spread from the two closest option expiration cycles with at least 8 days remaining to expiration to calculate a 30-day volatility for the index. VIX options trade from 8:30 AM – 3:15 PM CST in 21/2 point intervals and differ from other options in several ways. VIX options:

  • Are European style exercise
  • Expire 30 days prior to the third Friday of the following month
  • Settlement values are quoted under the symbol VRO
THE OPTION CLEARING CORPORATION

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