Do You Know How to Trade the VIX?

Here's a primer on the VIX products

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VIX Weeklys

vix weeklys Do You Know How to Trade the VIX?

VIX Weeklys are the newest VIX trading products. These weekly options on VIX futures expire on Fridays, as is the case with other weekly options, not on Wednesdays like standard monthly VIX options.

As I said before, monthly VIX options get cashed out when they expire, so you get delivery of nothing; you simply get a cash debit or credit based on the VIX settlement price and the options you are long or short. But with VIX Weeklys, you get delivery of a VIX future. So if you buy VIX weekly calls and they close in the money, you get delivery of VIX futures. And if you hold those VIX futures until expiration, you then cash settle based on the VIX settlement price at the future expiration.


Article printed from InvestorPlace Media, http://investorplace.com/2012/05/so-you-think-you-know-how-to-trade-the-vix/.

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