Trading on fear
Volumes for the Vix index options contract were solid in its first month of trading. Alexander Campbell assesses the prospects for this new product and finds out how access to the pure volatility instrument might change strategies
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 was 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 first day of
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