VIX Futures/Options

Discussion in 'Options' started by heech, May 19, 2009.

  1. heech

    heech

    Hi,

    Yes, I believe futures vix should basically converge to cash vix... but this is only approximation. On expiration day, they do a single sample of option prices at the open to generate the final vix future price (special opening quotation). This should basically be spot vix, but might not actually be identical.

    What numbers are you looking at that you think they're actually different...?
     
    #11     May 25, 2009
  2. dmo

    dmo

    The important thing is that at expiration, both the vix futures and options cash-settle to the same price.
     
    #12     May 25, 2009
  3. It IS spot VIX, at the open.
     
    #13     May 25, 2009
  4. heech

    heech

    Thanks for the clarification. Wish CBOE would just say that on their site, instead of the incredibly involved legalesse about special quotations.
     
    #14     May 26, 2009
  5. Volare

    Volare

    As you realize via this strategy you are short vol of vol. What makes you think vol of vol is priced rich?
     
    #15     Jun 10, 2009
  6. heech

    heech

    Backtesting.

    I'm not relying on a normal distribution in my strategy, so I'm making minimal assumptions of vol of vol. But whatever it is, it's working well.
     
    #16     Jun 10, 2009