on I.B i don't get options on VIX futures... dmo do you know
any retail broker that offers that and exchange?
VIX options
- Thread starter l2tradr
- Start date
on I.B i don't get options on VIX futures... dmo do you know
any retail broker that offers that and exchange?
Quote from rallymode:
Yes they exist. I'd be starving if it werent for vix futures.
dmo is on point that its the most widely misunderstood product not that the average ETer has a basic understanding of much.
ok i will bite, how do you trade this? Use it as part of the hedge, or daytrade/trend the futures?
There are many ways to trade vix futures. It all depends on your objective(perceived edge). You can trade switches directionally, you can trade convergence to vix spot, you can replicate vols(synthetic vix), you can hedge book index vega exposure, etc. Furthermore, illiquidity and misunderstanding by the masses is somewhat of an edge in itself.
Hi rallymode
I don't trade VIX but I would like to know how do you simply replicate VIX spot ?
IIRC to hedge Vega exposure of an index book, one (professional) used variance swaps. It's something somewhat difficult for a retail trader.
So how do you hedge an index book with VIX future. Do you convert all your vegas in a one (front) month vega exposure then you hedge it (though the links between vegas for different maturities aren't quite steady) ?
Thx in advance for your answer.