When do vix options stop trading

Settlement symbols are usually published minutes after the market open. The settlement value is determined on the morning of the listed expiration date by their settlement symbol.

Settlement symbols are usually published 30 to 60 minutes after the market open. The most commonly traded symbols and their settlement symbols are listed below:. Any open monthly SPX options position or any other monthly index option with an AM expiration on the listed expiration day cannot be closed because it is already expired. The last day to trade or close a monthly index option is the trading day before.

If you are considering adding volatility to your toolbox of trading and portfolio management methods, there are a few things you should know as you get started.

There are two different expiring sets of SPX options feeding into the VIX calculation with the two series being time weighted to determine a consistent day measure of implied volatility. Data Source: Bloomberg. The futures trade in increments of 0. The hours for VIX Futures trading were expanded to almost 24 hours a day five days a week in June Spot VIX is also calculated and quoted outside of US trading hours, beginning at am Chicago time which coincides with markets opening in Europe.

In addition, there are standard VIX Futures contracts that expire each month. These complicating factors typically include price changes in the underlying securities, dividends , and interest rates. VIX options allow traders to focus almost exclusively on trading volatility. Traders have found the VIX very useful in trading, but it now provides superb opportunities for both hedging and speculation.

VIX may also be an excellent tool in the quest for portfolio diversification. Diversification, which most investors find highly desirable, is useful only if the securities selected are not correlated. In other words, if you own ten big tech stocks that tend to move together, then you aren't diversified. According to the Cboe, the VIX has had a negative correlation of -.

From to Sept. The negative relationship between the VIX and SPX can make it an excellent diversification tool, providing market disaster insurance. The VIX reached a closing high of That record stood for over a decade. However, the VIX reached a new record high close of The above chart shows how the VIX trades within a given range, bottoming out around ten. If it were to go to zero, it would mean that the expectation was for no daily movement in the SPX. However, the VIX cannot stay there either.

A consistently high VIX would imply that the market expectation was for substantial changes over an extended time frame. A fixed trading range means that VIX options offer excellent opportunities for speculation. Similarly, buying puts, buying bear put spreads , or selling bear call spreads can help a trader profit when the VIX tops out. Despite their advantages for speculators, VIX options are high-risk investments and should play a relatively small role in most portfolios.

However, the value of the options is not derived directly from the "spot" VIX. Instead, it is based on the forward value using current and next month options. Vix options can offer a higher volatility rate than some stock options available to investors. An instrument that trades within a range cannot go to zero, and its high volatility can provide outstanding trading opportunities. However, volatility is a double-edged sword, meaning just as the VIX can rise quickly, leading to financial gains, it can also drop quickly, leading to financial losses for investors.

Unlike standard equity options, which expire on the third Friday of every month, VIX options expire on one Wednesday every month. Vix options are traded frequently, providing investors with good liquidity , meaning investors can usually buy and sell without disruptions or delays when a broker fills a trade. Although there's ample liquidity with VIX options, it doesn't guarantee that there won't be market disruptions.