Here's something else to think about........... Do you think that vol will decrease in the out of the money puts with the addition of the new VIX. My thinking is that if there is now another contract that can provide some sort of a hedge (obviously isn't close to a perfect hedge, but can provide some hedge) to a naked put position that more people will be willing to sell them -- thus driving down the price ?? Just a thought. Taking some of the premium out of these options (where the MMs make their money selling them and managing the risk) could be yet another blow to index option MMs. Vega
Why I'm torn -- a great contract(potentially) and if successful we may see a flat volty curve! I don't see the vix futures effecting a flat volty skew and the current large premium to cash will tend to mitigate the short put//long vix efficacy. riskarb
I like to make you think Risk--I can hear the wheels turning all the way out here in the western suburbs The wheels on the bus go round and round, round and round, round and round................................... Just kidding, have fun with your new toy. Vega