A look at Volatility (VIX) trading – Shaun Richards [Video]
|Shaun Richards from Not A Yes Man Economics and Mike Ingram, Strategist at BGC Partners, discussed how the VIX index works and how traders could trade the volatility via options.
Option traders keep an eye on Implied Volatility (IV) as rising IV adds to the option price and vice versa. Ingram and Richards dive deep into the options pricing model and discuss the concept of Implied Volatility and Historical Volatility.
Currently, VIX is very low ...to the point where experts say markets are complacent about near term risks. Though not a perfect indicator, option traders keep an eye on Implied Volatility (IV) as rising IV adds to the option price and vice versa. Moreover, VIX trading is simply putting a price to the volatility or uncertainty.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.