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

Related Articles
  1. Trading

    Introducing The VIX Options

    Discover a new financial instrument that provides great opportunities for both hedging and speculation.
  2. Investing

    The VIX: Using the "Uncertainty Index" for Profit and Hedging

    Learn the best ways to profit from and hedge volatility using VIX and alternative strategies.
  3. Trading

    Volatility - The Birth Of A New Asset Class

    Learn more about the trading possibilities with the VIX.
  4. Trading

    Determining Market Direction With VIX

    The CBOE's volatility index is a helpful market indicator. Learn how it can gauge the mood of the stock market.
  5. Investing

    Tracking volatility

    When market volatility spikes or stalls, the VIX (the CBOE Volatility Index) is a benchmark index designed to track S&P 500 volatility. Learn how VIX is calculated.
  6. Investing

    The VIX Is a 'Giant Casino' That May Magnify Losses

    The VIX has spawned a giant trading ecosystem that may lead to major losses when turbulence hits
  7. Investing

    What Does the Volatility Index (VIX) Indicate?

    The VIX is often called the fear gauge of the markets – understand what it means for your investments.
  8. Investing

    Top 3 Inverse Volatility ETFs for 2018

    By seeking the inverse of the performance of the volatility index, some investors make strong returns.
  9. Investing

    Understand the Risks of Trading Inverse ETFs

    Inverse ETFs sound like a great way to take advantage of market volatility. But it's important to understand how they work before you invest.
Trading Center