anyone trade VIX options?

Discussion in 'Options' started by increasenow, Feb 16, 2009.

  1. anyone trade VIX options?
    what is your strategy? etc.
  2. ETFDesk


    VIX options are European settlement meaning it can trade below its intrinsic value and can only be exercised at expiration. Here's a link to the VIX options guide at the CBOE.

    forgot one thing, i wouldn't trade them. The vix is best used as a good indicator for tradable market moves.
  3. why not?also...I dod not care about exercising them...just trading to profit...they seem very liquid also...
  4. ziradee


    The VIX Index Is a Theoretical Calculation and Is Not a Tradable Index.

    You can not exercise these options they are cash settled!
  5. ziradee


    My apologies, didn't see that.

    Just remember trade VIX options and you're trading a derivative on a derivative on an estimate of a derivative. The VIX itself is merely a statistically calculated estimate of a theoretical SPX option with 30 days until expiration.
  6. anyone here trade them and make $$$$?
  7. ETFDesk


    They do exercise, for cash.
  8. Be sure that if its a tradable product someone on ET will tell you they make a fortune trading it.
  9. VIX options do not behave as you may expect them to behave.

    They often trade under parity.

    These options are too sophisticated for most traders I suggest you find something eslse to trade. If you don't like that advice, then be certain you understand every aspect of why these options are so different and why they don't move higher and lower when you think they should.

    Good luck


  10. They dont trade under parity, they trade under what people precieve as parity for other types of options. Rest assured they dont trade under their correct parity
    #10     Feb 16, 2009