Futures For You | NOV 2009
Futures For You by Carley Garner
Futures For You by Carley Garner VIX FUTURES How can I trade Vix futures? On March 26, 2004, the Chicago Board Options Exchange (Cboe) listed a futures contract with its volatility index (Vix), often referred to as the fear index, as the underlying asset. Although the Vix has been in existence for some time, it wasn’t always tradable via futures contracts. As is the case with any new listed product, liquidity has been an issue for Vix speculators; however, volume and open interest are on the rise. That said, don’t make the mistake of attempting to trade the miniversion of the Vix. It is common to see fewer than 20 contracts traded in a session and the lack of volume in the minicontract creates large bid/ask spreads, increasing the intrinsic costs of participating in the market. This might make exiting the trade difficult and expensive in fast-moving market conditions. The value of the Vix is relative to real-time prices of options on the Standard & Poor’s 500 (Spx) also listed on the Cboe. The Vix is intended to reflect the investor’s consensus view of future market volatility over the next 30 days or so and will fluctuate with the implied volatility built into option pricing.
by Carley Garner
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.