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A volatility exchange-traded fund (ETF) lets traders bet on an increase in the stock market’s volatility. It can be a highly profitable wager if the market suddenly becomes more volatile, for ...
An option’s implied volatility (IV) gauges the market’s expectation of the underlying stock’s future price swings, but it doesn’t predict the direction of those movements.
This index, now known as the VXO, is a measure of implied volatility calculated using 30-day S&P 100 index at-the-money options. [ 25 ] 1993 – Professors Brenner and Galai develop their 1989 proposal for a series of volatility index in their paper, "Hedging Volatility in Foreign Currencies," published in The Journal of Derivatives in the fall ...
IVX is the abbreviation of Implied Volatility Index and is a popular measure of the implied volatility [1] of each individual stock. [2] IVX represents the cost level of the options for a particular security and comparing to its historical levels one can see whether IVX is high or low and thus whether options are more expensive or cheaper.
There are also other commonly referenced volatility indices such as the VXN index (Nasdaq 100 index futures volatility measure), the QQV (QQQ volatility measure), IVX – Implied Volatility Index (an expected stock volatility over a future period for any of US securities and exchange-traded instruments), as well as options and futures ...
To an option trader engaging in volatility arbitrage, an option contract is a way to speculate in the volatility of the underlying rather than a directional bet on the underlying's price. If a trader buys options as part of a delta-neutral portfolio, he is said to be long volatility. If he sells options, he is said to be short volatility. So ...
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