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Trading the Vix futures volatility index
 


  The VIX is related to the S&P 500 if the 500 drops sharply the Vix futures tends to go up. Most of the time the same is true if the S&P 500 is going up the VIX futures tend to go down.

  This is not always the case but more often then not this holds true. VIX futures have been offered on the CBOE Futures Exchange since 2004. Since the Chicago Board

                


 Options Exchange (CBOE) introduced futures and, subsequently, options on its Volatility Index, or VIX. At a quoted price of $12.1, one VIX futures contract is worth $12,100. Settlement. CBOE VIX futures are cash-settled and so, unlike futures on commodities.
 The VIX futures are very different from other index futures in that there prices are determined by a cost of carry but rather the market anticipation of the thirty day overall implied volatility of the SPX options will be at the VIX futures expiration. Many time traders will see the VIX futures trading above the VIX index other times it will be below.
 
  This can be an indication of the market's fear or complacency about the overall market action in the months ahead. Traders need to be aware if they trade the VIX futures that it does not always move in the same direction as the VIX index. Yhe VIX fitures will move close to the S&P 500 futures cash index. VIX is traded on the CBOE futures exchange and one point is worth one thousand dollars and the mini tick is worth .05 or fifty dollars. Vix futures are related to the S&P 500 because of the vix index itself is based on the SPX option prices.
 
  They are also used to value options on the vix index even though those are cash settled. The VIX futures and VIX are settled on the same day. The Wednesday that is thirty days prior to the third Friday of the calendar month. One thing is for sure a trader needs to learn how to trade this type of index or he will quickly wipe out their trading account. At most brokerages you have to apply to trade this type of index. This type of futures trading is very speculative and is not for all investors. Traders need to learn how to do this type of trading.
 
  They need to know their risk factors and how much money they are willing to risk. When trading this type of index you start with what you know and many brokers offer free classes to help you become a better trader. This will make you a more confident futures trader and leaning how to read the charts is a big step in the right direction. Traders need to keep up with the current trends and news that can effect the markets. Learn support and resistance areas and know that world news can change the direction of the futures markets.

   Trading VIX Derivatives will show you how to use the Chicago Board Options Exchanges S&P 500 volatility index to gauge fear and greed in the market, use market volatility to your advantage, and hedge stock portfolios. Engaging and informative, this book skillfully explains the mechanics and strategies associated with trading VIX options, futures, exchange traded notes, and options on
 exchange traded notes.   Learn to trade the VIX


                    


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