VIX Futures

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shorty_mcshort

It has been over a year and the volume on this product is pathetic. When if ever is this thing going to be tradeable for short term swings. By short term, I mean a day to two hoding time. The spreads in the morning opening are freakin 2 points wide! :eek: It seems to narrow during the day but not by much. I noticed near the end of the day today the near contract traded a total of 9 contracts. I would have thought that this would have been a very popular vehicle to trade when it first was introduced. Anyone have any insight on when liquidity will arrive? If ever?

E
 
In it's current form, I don't see liquidity arriving. The contract simply doesn't move in sync enough with the VIX to be a viable hedge. Take a look at the recent 11 to 18 VIX swing and track the VIX futures move - it was a fraction of the actual move. Between the lack of sync and the wide spreads, the product is a bust IMO. It's a shame, because there is still a legitimate and substantial need for a product of this type.
 
What happened to this

:(

I guess a news release coming out of BOCA RATON should have been the first clue it was a scam heh!

http://www.cboe.com/AboutCBOE/ShowDocument.aspx?DIR=ACNews&FILE=20050318a.doc&CreateDate=18.03.2005

CBOE TO LIST OPTIONS ON THE CBOE VOLATILITY INDEX (VIX); Investors Now Have Opportunity To Trade Options On The Market's Widely-Disseminated "Fear Gauge"

BOCA RATON, FL & CHICAGO, IL, March 18, 2005 - The Chicago Board Options Exchange (CBOE) announced today that the exchange plans to list options on the CBOE Volatility Index, VIX, (ticker symbol VXB) for trading beginning Friday, April 22, 2005.VIX is the widely disseminated, benchmark index commonly referred to as the market's "fear gauge," and for the first time, investors will now have an opportunity to trade options on this premier measure of market volatility and investor sentiment.Futures on the CBOE Volatility Index (ticker symbol VX) were first launched one year ago and are traded on the CBOE Futures Exchange (CFE
 
institutions are using variance swaps, and the public retail guys aren't really playing either due to lack of sophistication or under-capitalization. spreads aren't particularly attractive neither.
 
Quote from ktm:

In it's current form, I don't see liquidity arriving. The contract simply doesn't move in sync enough with the VIX to be a viable hedge. Take a look at the recent 11 to 18 VIX swing and track the VIX futures move - it was a fraction of the actual move. Between the lack of sync and the wide spreads, the product is a bust IMO. It's a shame, because there is still a legitimate and substantial need for a product of this type.
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That is really too bad because volitility seems easier to trade than equities. I was planning on taking directional trades for short term swings. Maybe the options will be better if they ever get up and running but somehow I doubt they will be if they are derived from VBI instead of the VIX.
 
Quote from shorty_mcshort:

That is really too bad because volitility seems easier to trade than equities.
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That's exactly why the VIX futures don't track the VIX. Mean reversion of volatility is strong and the contract is hard to replicate so nobody's going to take the other side. At least that's the way I see it.

Martin
 
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