Using VIX futures to manage equity risk over the US Election
One-way traders can look at expected volatility and movement in the S&P500 over the US election volatility is by looking at the premium or the differential that VIX October futures hold over VIX November futures.
Because the VIX index takes in a series of S&P500 options strikes that blend to create a 30-day implied volatility, the October VIX futures essentially looks at S&P500 volatility over the November US election.
Therefore, the higher the premium for VIX October futures over November futures, the greater demand for volatility over the election and the greater the implied movement in US equity markets.
This can be useful for traders who look at event risk and consider the propensity and extent of movement, and whether they want to hold exposures over that risk.
The code in TradingView to use is - VXV2024-CBOE:VXX2024
Because the VIX index takes in a series of S&P500 options strikes that blend to create a 30-day implied volatility, the October VIX futures essentially looks at S&P500 volatility over the November US election.
Therefore, the higher the premium for VIX October futures over November futures, the greater demand for volatility over the election and the greater the implied movement in US equity markets.
This can be useful for traders who look at event risk and consider the propensity and extent of movement, and whether they want to hold exposures over that risk.
The code in TradingView to use is - VXV2024-CBOE:VXX2024
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.