Trading VIX Derivatives: Trading and Hedging Strategies Using VIX Futures, Options, and Exchange-Traded Notes: 503 (Wiley Trading) - Hardcover

Rhoads, Russell

Hardcover

ISBN 10: 0470933089 ISBN 13: 9780470933084

Publisher: Wiley, 2011

Synopsis

A guide to using the VIX to forecast and trade markets

Known as the fear index, the VIX provides a snapshot of expectations about future stock market volatility and generally moves inversely to the overall stock market. Trading VIX Derivatives will show you how to use the Chicago Board Options Exchange's S&P 500 volatility index to gauge fear and greed in the market, use market volatility to your advantage, and hedge stock portfolios. Engaging and informative, this book skillfully explains the mechanics and strategies associated with trading VIX options, futures, exchange traded notes, and options on exchange traded notes.

Many market participants look at the VIX to help understand market sentiment and predict turning points. With a slew of VIX index trading products now available, traders can use a variety of strategies to speculate outright on the direction of market volatility, but they can also utilize these products in conjunction with other instruments to create spread trades or hedge their overall risk.

• Reviews how to use the VIX to forecast market turning points, as well as reveals what it takes to implement trading strategies using VIX options, futures, and ETNs
• Accessible to active individual traders, but sufficiently sophisticated for professional traders
• Offers insights on how volatility-based strategies can be used to provide diversification and enhance returns

Written by Russell Rhoads, a top instructor at the CBOE's Options Institute, this book reflects on the wide range of uses associated with the VIX and will interest anyone looking for profitable new forecasting and trading techniques.

About this title

About the Author

RUSSELL RHOADS, CFA, is an instructor for the Options Institute at the Chicago Board Options Exchange. He teaches about ninety classes a year and conducts webinars on behalf of the CBOE and a variety of brokerage firms. Rhoads's twenty-year trading career has included positions at a variety of trading firms and hedge funds. His background includes trading and analysis, and he is the author of the Wiley titles Candlestick Charting For Dummies and Option Spread Trading. Rhoads graduated from the University of Memphis with an MS in finance and has a master's certificate in financial engineering from the Illinois Institute of Technology.

From the Back Cover

TRADING VIX DERIVATIVES

While the Chicago Board Options Exchange (CBOE) Volatility Index, widely know by its ticker symbol VIX, is often referred to as the "fear index," it is much more than an index of fear in the stock market. Nobody understands this better than author Russell Rhoads, a top instructor at the CBOE's Options Institute. Now, in Trading VIX Derivatives, he skillfully explores the ins and outs of this popular market indicator, or index, that is based on implied volatility.

Engaging and informative, this reliable resource provides you with a solid understanding of implied volatility, the VIX index, methods of using the VIX for market analysis, and ways to directly trade volatility.

Page by page, you'll become familiar with a number of volatility-related indexes and products currently available from the S&P 500 Implied Correlation Index (VTY) and CBOE Crude Oil Volatility Index to VIX futures, options, and exchange-traded notes. There are unique features to many of the derivative contracts that are based on implied volatility, and they are touched on throughout the book.

Along the way, Rhoads takes the time to highlight the various uses of volatility-related indexes and products. Methods to speculate on the direction of the overall market, or just volatility, are skillfully addressed as well as how to apply volatility derivatives to hedge traditional portfolios. Rhoads rounds out his detailed discussion of trading VIX derivatives by offering you valuable insights on everything from calendar spreads with VIX options and futures to iron condors and butterflies with VIX options.

Volatility as an asset class and trading tool continues to be a rapidly growing area in the markets. With this book as your guide, you'll quickly discover a wide range of uses associated with the VIX and learn how to implement profitable new forecasting and trading techniques into your everyday investing endeavors with it.

From the Inside Flap

TRADING VIX DERIVATIVES

While the Chicago Board Options Exchange (CBOE) Volatility Index, widely know by its ticker symbol VIX, is often referred to as the "fear index," it is much more than an index of fear in the stock market. Nobody understands this better than author Russell Rhoads, a top instructor at the CBOE's Options Institute. Now, in Trading VIX Derivatives, he skillfully explores the ins and outs of this popular market indicator, or index, that is based on implied volatility.

Engaging and informative, this reliable resource provides you with a solid understanding of implied volatility, the VIX index, methods of using the VIX for market analysis, and ways to directly trade volatility.

Page by page, you'll become familiar with a number of volatility-related indexes and products currently available—from the S&P 500 Implied Correlation Index (VTY) and CBOE Crude Oil Volatility Index to VIX futures, options, and exchange-traded notes. There are unique features to many of the derivative contracts that are based on implied volatility, and they are touched on throughout the book.

Along the way, Rhoads takes the time to highlight the various uses of volatility-related indexes and products. Methods to speculate on the direction of the overall market, or just volatility, are skillfully addressed as well as how to apply volatility derivatives to hedge traditional portfolios. Rhoads rounds out his detailed discussion of trading VIX derivatives by offering you valuable insights on everything from calendar spreads with VIX options and futures to iron condors and butterflies with VIX options.

Volatility as an asset class and trading tool continues to be a rapidly growing area in the markets. With this book as your guide, you'll quickly discover a wide range of uses associated with the VIX and learn how to implement profitable new forecasting and trading techniques into your everyday investing endeavors with it.

Edition details

• Publisher: Wiley
• Publication date: 2011
• Language: English
• ISBN 10: 0470933089
• ISBN 13: 9780470933084
• Binding: Hardcover
• Edition number: 1
• Number of pages: 288