Strategies

Strategies Involving Volatility and VIX

VIX Futures and Options

Detailed contract specifications for VIX Futures can be found here.

VIX futures and options could be used by investors for a variety of purposes, including:

To take advantage of a market view on the direction of near- term volatility,
To hedge volatility risk with VIX futures or VIX options,
To manage risks associated with the growing markets for volatility and variance swaps,
To take advantage of arbitrage opportunities between S&P 500 (SPX) options and VIX futures and options.

Options Strategies Involving Volatility and VIX
If an investor has a view that VIX and VXN might rise significantly in upcoming months, the investor could consider a long straddle (Adobe .pdf) with index options - a long straddle involves holding both a long call and a long put position with the same strike price and time to expiration. The investor also could consider a long strangle.

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (ODD). Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606. The information on this website is provided solely for general education and information purposes and therefore should not be considered complete, precise, or current. Many of the matters discussed are subject to detailed rules, regulations, and statutory provisions which should be referred to for additional detail and are subject to changes that may not be reflected in the website information. No statement within the website should be construed as a recommendation to buy or sell a security or to provide investment advice. The inclusion of non-CBOE advertisements on the website should not be construed as an endorsement or an indication of the value of any product, service, or website. The Terms and Conditions govern use of this website and use of this website will be deemed acceptance of those Terms and Conditions.