Trading on fear

Volatility options


Exchange-traded contract launches are often characterised by an initial flurry of activity, followed by modest volumes and then a period during which the product either establishes itself, or dies a slow death. Certainly, the debut on the Chicago Board Options Exchange (CBOE) of a new listed options contract referencing the Vix index has been solid. The Vix measures the weighted average implied volatility of eight at-the-money and near-at-the-money S&P 100 equity index options. During the fi