What is difference between VIX and VVIX?

Both the VIX and VVIX are similar. While the VIX measures the implied volatility of the S&P 500 the VVIX measures the implied volatility of the VIX. Both indices are correlated and will move often in conjunction thus making for a good pairs trade.

What VVIX tells us?

VIX of VIX (or VVIX) is a measure of the volatility of the Cboe Global Markets (Cboe) Volatility Index (VIX). The Cboe’s VIX measures the short-term volatility of the S&P 500 indexes, and the VVIX measures the volatility of the price of the VIX.

What is Vxo?

This index, now known as the VXO, is a measure of implied volatility calculated using 30-day S&P 100 index at-the-money options.

What is CBOE investopedia?

What Is the CBOE Options Exchange? Founded in 1973, the CBOE Options Exchange is the world’s largest options exchange with contracts focusing on individual equities, indexes, and interest rates.

How do you use VIX index?

There are two ways to use the VIX in this manner: The first is to look at the actual level of the VIX to determine its stock-market implications. Another approach involves looking at ratios comparing the current level to the long-term moving average of the VIX.

What does vol of vol mean?

the volatility of volatility
The VVIX is often referred to as ‘the VIX of the VIX’ or ‘the vol of vol’—that is, the volatility of volatility. The VIX is a measure of the expected volatility in S&P 500 index options. It trades as a futures contract, and there are also options traded on this futures contract.

How do I trade VVIX?

You can’t trade VVIX directly because it’s just an index with no options or even futures contracts. But just as VIX can give an indication about how to create strategies in SPX options, VVIX can indicate how to create strategies in VIX options. A low VVIX indicates that VIX options may be relatively inexpensive.

What is a volatility ETF?

Definition: Volatility ETFs offer exposure to volatility in one form or another. Often referred to as “fear” indicators, these funds tend to move in the opposite direction of the broad market. Thus, these funds are used primarily by traders looking to capitalize on sharp market downturns.

When should I buy VIX?

So what’s the ideal VIX level to begin buying? Our research indicated that the optimal returns (again, historically at least) were achieved when the VIX moved above 33. On the other end, it’s time to sell if the VIX moves below 12.