Home

What Is Volatility Index? | VIX | Trading using Options Sentiment Indicators

URL
https://www.youtube.com/watch?v=JyxI3efcbxo
Views
120
Description
Part of the course 'Trading Using Options Sentiment Indicators' on Quantra. Start for FREE! https://quantra.quantinsti.com/course/trading-using-options-sentiment-indicators Implied volatility is forward looking, and it is an indication of the volatility of the future market. Volatility Index or VIX is one such indicator that helps us understand the sentiment in the market using implied volatility. VIX is a trademark ticker symbol for the Chicago Board Options Exchange (C B O E) Volatility Index. It is a measure of the implied volatility over the next 30 days for the S AND P 500 index options. VIX was introduced in 1993. It was originally a weighted measure of the eight S AND P 100 stocks. Later, it expanded and options were taken from a broad range in the S AND P 500 index. VIX is an up-to-the-minute market estimate for implied volatility of the S AND P 500 Index. It is calculated by taking the midpoints of the bid-ask quotes (that is price of options), of the real-time S AND P 500 index options. For each tick VIX provides an instantaneous measure of how much the market would fluctuate in the next 30 days. Hence the volatility index is forward looking and it predicts the volatility of the market in future. While calculating VIX of S AND P 500 index, the variance of all the options that are included in VIX are taken into consideration. The variance of options with expirations of near month and next month that is first and second month are considered. So, options with more than
Rating
5
Name
Quantra
Date
2022/04/29
TOP