Volatility Trading - Common Strategies and Tips

The CBOE Volatility Index (VIX), first introduced in 1993, measures the 30-day expected volatility of the S&P 500 Index (SPX). Another way of putting it is that the Volatility Index attempts to measure the amount of fear or stress in the market, which led to it being widely known as the "fear index."

As investors become fearful over the possibility of declining equity prices, they purchase protection using put options. This increased demand for protection drives put option prices higher, thereby increasing the implied volatility. So, as the VIX rises, it becomes an indirect measurement of market sentiment and serves as a fear gauge. However, to the astute trader, "fear" is another word for opportunity.

Warren Buffet once said to be fearful when others are greedy, and greedy when others are fearful. When volatility surges and fear is in the air, trading strategies such as put credit spreads (the act of selling one put and buying a lower strike put) can offer lucrative opportunities. The right strategy will depend on the environment and the trader’s risk appetite.

Join John Rowland, Barchart's Head of Trading Education, as he explains how the Volatility Index is calculated and how it can be used to measure sentiment and the amount of fear in the market. John will also discuss the strategies that one can use to take advantage of both low and high-volatility environments.

In this webinar, you will learn how to:

- Measure market sentiment using the VIX
- Calculate a one-day expected price move using the VIX
- Implement options strategies based on volatility levels

#optionstrading #trading #stockmarket

[chanhh]

Very good explanation of the VIX. A good intro to the IV which has been a mystery concept for me for a while.

[ws-]

Thanks for John's perspective and his educational input.

[pitaeata]

I always learn something when I watch a barchart video :)

[AlchFi]

Would you all happen to have a 1080p HD version to upload (in likeness with the other uploaded recordings)? Noticed that the max quality is 360p. Thanks much always! 💪

[MJ-qfgg]

Great content. Question: There are two symbols vixy and $vixy. Both are different prices. I am not able to buy the $vixy with my broker. I know $ means index. What am I missing? How do I buy $vixy, do I use a different ticker. Thanks (BarChart Paid Subscriber).

[thegamerboneless]

I love my hedges but I love options, I started option trading when I first started investing, just for protection, on value/growth portfolio, but to be honest, my portfolio wasn’t moving like I thought, I thought I be the next Icahn, or Dr.Thorpe, 😂 anyway, yea I tried options, I lost a lot of money, but kept at it, and settled, I did well, and still do. I will say you can get into some trouble especially if you trade margin, so be carful 😂