Volatility options and futures trading
You need to keep in mind that all Futures contracts will eventually merge to the cash levels. The basic reason why it is important to understand volatility is because it will tell you what your best plan of action is, as far as what type of position to take in the markets. If you understand the effect that volatility has on the options market, you will understand how sometimes extraordinary profits can be pulled from trading commodity options with very little relative investment. Tagged With commodities options tradingcommodity option tradingcommodity volatility options and futures tradingCommodity Options Tradingfutures option tradingfutures options tradingoption volatilityoptions volatility volatility options and futures trading, trade commodity optionstrading commodity optionstrading volatilityvolatility.
The Futures VX Contract does not always move in the same direction as the cash index. Before I get sidetracked, let me mention the fact that there are two types of volatility in commodity options trading and really all options trading for that matter: Keep up the good work.
About Optimus Futures Optimus Futures is a leading online futures broker that caters to traders seeking fast execution and stable data feeds combined with aggressive margins and deep discount commissions. If you use it right, volatility can be your best friend. If you were to overlay the cash index over the futures contract, you would see that they do not symmetrically superimpose on one another. Remember the option is only going to be as stable as the futures contract that volatility options and futures trading option represents. If you were to overlay the cash index over the futures contract, you would see that they do not symmetrically superimpose on one another.
The Futures VX Contract does not always move in the same direction as the cash index. You will find that during low volatility periods, the VX Futures contracts will trade at a premium to the cash in contangoyet in high volatility periods, you may find that the contracts are trading in backwardation where the further months are trading at a discount to the cash VIX volatility options and futures trading. Past performance is not indicative of future results. You can do that as a speculator, or as an investor trying to protect your portfolio. Past performance is not indicative of future results.
This is because the VX Futures contract also has a component of supply and demand. There is a substantial risk of loss in futures trading. Trading VIX Futures lets you take advantage of volatility in the marketplace during both calm trading periods as well as unstable markets resulting volatility options and futures trading political, social or economic events. Going back to the cash index versus the Futures contract: