I just found out about options on vxst, a short term volatility index. They have weekly options which work well with a strategy that I have, but trading volume is extremely low. I just wondered what other people though about trading these options and if liquidity will pick up anytime soon.
It wasn't until I traded them that I realized settlement was on the open the day after last trading day.
I don't believe liquidity will pick up. I think this is a dead product as it currently exits. The weekly options are based on a weekly vix future. The future has almost no volume and can't even be traded using many platforms.
"As of June 18, 2015, CBOE and CFE will not be adding any new VXST futures and options, but may do so at a later date." -- http://www.cboe.com/micro/vxst/ (as I viewed it on June 22, 2015) This may be part of a purge of several volatility futures and options products over the past couple of months, at least judging from their disappearance from Interactive Brokers: OVX - oil futures volatility VXEEM - volatility of EEM ETF (emerging markets) VXEWZ - volatility of EWZ ETF (Brazil) VXN - Nasdaq 100 volatility VXST - Weekly S&P 500 volatility VXTYN - US ten year treasury note volatility I believe that the Chicago Board of Exchange is continuing to publish these indexes, as they do for several other volatility indexes that are not currently used as the basis for any exchange traded financial products (for example, the Dow, S&P 100, Apple, Amazon, Google). If I understand correctly, these may be the only volatility indexes with US futures contracts remaining: VIX - S&P 500 volatility RVX - Russell 2000 volatiilty VA - S&P 500 variance swaps (slightly different animal, not available at Interactive Brokers)