Learn the trade here. Make it on tradeMONSTER

Options Trading News

February 27, 2012  Mon 1:46 AM CT

VIX: SEE CHART GET CHAIN FIND STRATEGIES
Friday was yet another odd day for the VIX as the volatility index and its associated futures rose along with the S&P 500.

The VIX finished the day up 3 percent to 17.31, while the S&P 500 gained just over 2 points to finish at 1365.74.

This is unusual because the VIX is usually inversely correlated with the S&P 500 and is relatively weaker on Fridays as the SPX options are repriced for weekend time decay. But the last few weeks have been anything but usual in the land of VIX.

The VIX finished the holiday-shortened week lower than the previous Friday's close of 17.78. The front-month March VIX futures closed the previous week at 22.60, just shy of a 4-point premium over the spot index reading.

Those futures closed at 21.15 on Friday, gaining 4.7 percent on the day. They lost some ground on the week but maintained a 3.84 premium as expiration is now just over three weeks away in this long expiration cycle.

The VIX may seem quite low, and many are throwing around the term "complacency" to describe the index. But the actual volatility of the S&P 500 is less than 8.5 percent in the last 20 and 30 days. So, in my book, it is difficult to say the VIX is complacent when it is still pricing in a full doubling of volatility in the next 30 days.
Share this article with your friends


Related Stories

VIX

Rally drives volatility indexes lower

September 19, 2014

The major equity indexes pushed to new highs yesterday as volatility measures continued to fall. The VIX was down nearly 5 percent.

VIX

Equities slightly higher after wild ride

September 18, 2014

Equity indexes spiked lower and higher after yesterday's Federal Reserve announcement but ended the session little-changed, with slight gains.

VIX

September VIX settles at 13.03

September 17, 2014

The September VIX futures settled this morning at 13.03, right where the spot CBOE Volatility Index opened the session.

VIX

VIX declines as equities rebound

September 17, 2014

The major equity indexes rebounded sharply yesterday, driving the CBOE Volatility Index lower by nearly 10 percent.

VIX

Equities drop, send VIX above 14

September 16, 2014

Equity indexes finished yesterday in the red but were above the lows of the day. The CBOE Volatility Index posted its first close above 14 in a month.

Premium Services

Free Webinars

Swing Trading w/ Jon Najarian and Ron Ianieri

Education & Strategy

Make your rules, and stick by them!

New traders often act on the recommendations of others or on gut feel. But that is a quick way to...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER