Volatility is Traded Now More Than Ever

Another day, another crisis, another short term pop in the VIX. Both “major” moves this month have come from news about North Korea. Just two weeks ago, we questioned which crisis would be different from the rest; to cause long term volatility in the markets. The early August VIX pop reverted back to its typical 2017 range, but the VIX did experience new highs when it came to the open interest. Here’s Matt Moran of the CBOE.

Despite the fact that the average daily closing value of the CBOE Volatility Index® (VIX®) is about 11.5 so far this year, VIX futures and options both had record days for volume and for open interest this month.

OPEN INTEREST RECORDS. VIX futures hit a new record for open interest with more than 673,000 contracts on August 7, and VIX options reached a new record for open interest with 14,783,380 contracts open on August 15.

CBOE VIX Open Interest

When you first think about it, there’s something odd about having consistently calm markets paired with charts showing open interest growing to new all-time highs. It’s easy to assume that the more trading that happens in a market, the more likely the price is to move. Sure, there’s been multiple spikes in the VIX markets, but overall the price has remained consistently low. Why aren’t we seeing more movement with the rise in trading? Is the tail wagging the dog? Or is this consistent uptick in trading from guys like this who turned $500,000 into $12 Million shorting the VIX in five years? To learn more about VIX Futures and Options, and from professional traders utilizing these markets, download our fundamental report to help investors understand the VIX.

VIX Whitepaper Banner

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.