什么是VIX期权？

# What are VIX options?

VIX options are a non-stock index option whose underlying asset is the Cboe Volatility Index.

Main points

• VIX options are based on the S&P 500 Volatility Index.
• VIX call options provide a natural hedge against falling price shocks.
• VIX puts can be difficult to use because the S&P 500 doesn't often rise quickly.
• VIX options adopt a European-style options trading model.

Understanding VIX options

VIX options offer both call and put options. Call options can protect a portfolio against sudden market declines, while puts can protect against rapid reversals in short-term positions on the S&P 500 Index. These options allow traders and investors to speculate on future changes in volatility.

Since its launch in 2006, VIX options have become the first traded options to allow individual investors to trade market volatility. [1] Trading VIX options is a useful tool for investors. By purchasing VIX call options, traders can profit from a rapid rise in volatility.

Large increases in volatility often coincide with short-term price shocks to stocks. Increased volatility often, but not always, accompanies a downward trend in the market. Therefore, this call option is a natural hedging tool that can be used very strategically over the longer term and tactically in the short term. In many cases, it is more effective than stock index options.

VIX volatility has a slow falling and fast rising pattern. Therefore, VIX call options can be a very effective hedging tool when timed correctly; however, VIX put options are relatively difficult to use effectively. For traders who can accurately predict when the market will turn from a downtrend to an uptrend, put options can be profitable.

VIX options are cash-settled and use a European-style trading model. European-style options limit the exercise of the option until the expiration date. Traders can sell existing long positions or purchase equivalent options to close short positions at any time before expiration.

For advanced options traders, a number of different advanced strategies can be integrated by using VIX options, such as bull call spreads, butterfly spreads, etc. However, calendar spreads can face problems because the tracking between different expiration series is not as tight as that of stock options.

VIX explanation

The volatility index of Cboe Global Markets (Cboe), trading under the symbol VIX. However, the VIX is different from other trading instruments. It does not represent the price of commodities, interest rates or exchange rates, but rather shows the market's expectations for stock market volatility over the next 30 days. [2]

The VIX is an index calculated based on S&P 500 option prices. For these S&P options, the volatility estimate between the current date and the option expiration date forms the VIX. Cboe combines the prices of multiple options to come up with a volatility-weighted value that the index tracks. [3]

Since its introduction in 1993, the Volatility Index (VIX) was originally a weighted measure of the implied volatility of eight at-the-money put and call options on the S&P 100. Ten years later, in 2004, it expanded to use options based on the broader index, the S&P 500. [1] This expansion allows investors to more accurately predict future market fluctuations. VIX values ​​above 30 are often associated with significant volatility due to investor fear or uncertainty. Values ​​below 15 generally correspond to moments of less stress or even complacency in the market.

Another name for the VIX is the "fear index" due to its tendency to move significantly higher during times of market fear and uncertainty.

References

[1] Cboe Global Markets. "White Paper, Cboe Volatility Index," Page 3.

[2] Cboe Global Markets. "White Paper, Cboe Volatility Index," Page 5.

[3] Cboe Global Markets. "White Paper, Cboe Volatility Index," Page 4.

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