Trading VIX Derivatives: Trading and Hedging Strategies Using VIX Futures, Optio

Description: Trading VIX Derivatives by Russell Rhoads A guide to using the VIX to forecast and trade markets Known as the fear index, the VIX provides a snapshot of expectations about future stock market volatility and generally moves inversely to the overall stock market. FORMAT Hardcover LANGUAGE English CONDITION Brand New Publisher Description A guide to using the VIX to forecast and trade markets Known as the fear index, the VIX provides a snapshot of expectations about future stock market volatility and generally moves inversely to the overall stock market. Trading VIX Derivatives will show you how to use the Chicago Board Options Exchanges S&P 500 volatility index to gauge fear and greed in the market, use market volatility to your advantage, and hedge stock portfolios. Engaging and informative, this book skillfully explains the mechanics and strategies associated with trading VIX options, futures, exchange traded notes, and options on exchange traded notes. Many market participants look at the VIX to help understand market sentiment and predict turning points. With a slew of VIX index trading products now available, traders can use a variety of strategies to speculate outright on the direction of market volatility, but they can also utilize these products in conjunction with other instruments to create spread trades or hedge their overall risk. Reviews how to use the VIX to forecast market turning points, as well as reveals what it takes to implement trading strategies using VIX options, futures, and ETNsAccessible to active individual traders, but sufficiently sophisticated for professional tradersOffers insights on how volatility-based strategies can be used to provide diversification and enhance returns Written by Russell Rhoads, a top instructor at the CBOEs Options Institute, this book reflects on the wide range of uses associated with the VIX and will interest anyone looking for profitable new forecasting and trading techniques. Notes A resource for understanding and trading the Chicago Board Options Exchanges very popular index on stock market volatility. Back Cover TRADING VIX DERIVATIVES While the Chicago Board Options Exchange (CBOE) Volatility Index, widely know by its ticker symbol VIX, is often referred to as the "fear index," it is much more than an index of fear in the stock market. Nobody understands this better than author Russell Rhoads, a top instructor at the CBOEs Options Institute. Now, in Trading VIX Derivatives, he skillfully explores the ins and outs of this popular market indicator, or index, that is based on implied volatility. Engaging and informative, this reliable resource provides you with a solid understanding of implied volatility, the VIX index, methods of using the VIX for market analysis, and ways to directly trade volatility. Page by page, youll become familiar with a number of volatility-related indexes and products currently available--from the S&P 500 Implied Correlation Index (VTY) and CBOE Crude Oil Volatility Index to VIX futures, options, and exchange-traded notes. There are unique features to many of the derivative contracts that are based on implied volatility, and they are touched on throughout the book. Along the way, Rhoads takes the time to highlight the various uses of volatility-related indexes and products. Methods to speculate on the direction of the overall market, or just volatility, are skillfully addressed as well as how to apply volatility derivatives to hedge traditional portfolios. Rhoads rounds out his detailed discussion of trading VIX derivatives by offering you valuable insights on everything from calendar spreads with VIX options and futures to iron condors and butterflies with VIX options. Volatility as an asset class and trading tool continues to be a rapidly growing area in the markets. With this book as your guide, youll quickly discover a wide range of uses associated with the VIX and learn how to implement profitable new forecasting and trading techniques into your everyday investing endeavors with it. Flap TRADING VIX DERIVATIVES While the Chicago Board Options Exchange (CBOE) Volatility Index, widely know by its ticker symbol VIX, is often referred to as the "fear index," it is much more than an index of fear in the stock market. Nobody understands this better than author Russell Rhoads, a top instructor at the CBOEs Options Institute. Now, in Trading VIX Derivatives, he skillfully explores the ins and outs of this popular market indicator, or index, that is based on implied volatility. Engaging and informative, this reliable resource provides you with a solid understanding of implied volatility, the VIX index, methods of using the VIX for market analysis, and ways to directly trade volatility. Page by page, youll become familiar with a number of volatility-related indexes and products currently available--from the S&P 500 Implied Correlation Index (VTY) and CBOE Crude Oil Volatility Index to VIX futures, options, and exchange-traded notes. There are unique features to many of the derivative contracts that are based on implied volatility, and they are touched on throughout the book. Along the way, Rhoads takes the time to highlight the various uses of volatility-related indexes and products. Methods to speculate on the direction of the overall market, or just volatility, are skillfully addressed as well as how to apply volatility derivatives to hedge traditional portfolios. Rhoads rounds out his detailed discussion of trading VIX derivatives by offering you valuable insights on everything from calendar spreads with VIX options and futures to iron condors and butterflies with VIX options. Volatility as an asset class and trading tool continues to be a rapidly growing area in the markets. With this book as your guide, youll quickly discover a wide range of uses associated with the VIX and learn how to implement profitable new forecasting and trading techniques into your everyday investing endeavors with it. Author Biography RUSSELL RHOADS, CFA, is an instructor for the Options Institute at the Chicago Board Options Exchange. He teaches about ninety classes a year and conducts webinars on behalf of the CBOE and a variety of brokerage firms. Rhoadss twenty-year trading career has included positions at a variety of trading firms and hedge funds. His background includes trading and analysis, and he is the author of the Wiley titles Candlestick Charting For Dummies and Option Spread Trading. Rhoads graduated from the University of Memphis with an MS in finance and has a masters certificate in financial engineering from the Illinois Institute of Technology. Table of Contents Preface xiii Acknowledgments xv Chapter 1 Understanding Implied Volatility 1 Historical versus Forward-Looking Volatility 1 Put-Call Parity 4 Estimating Price Movement 6 Valuing Options: Pricing Calculators and Other Tools 6 Fluctuations Based on Supply and Demand 9 The Impact on Option Prices 13 Implied Volatility and the VIX 14 Chapter 2 About the VIX Index 15 History of the VIX 15 Calculating the VIX 17 The VIX and Put-Call Parity 18 The VIX and Market Movement 22 Equity Market Volatility Indexes 24 Chapter 3 VIX Futures 31 Steady Growth of New Products 31 Contract Specifications 33 Mini-VIX Futures 42 Pricing Relationship between VIX Futures and the Index 42 Futures Relationship to Each Other 46 VIX Futures Data 47 Chapter 4 VIX Options 49 Contract Specifications 51 Relationship to VIX Index 56 Relationship to VIX Futures 57 VIX Binary Options 58 Chapter 5 Weekly Options on CBOE Volatility Index Futures 61 Contract Specifications 62 Weekly Options and Index Options 63 Weekly Option Strategy 65 Chapter 6 Volatility-Related Exchange-Traded Notes 69 What are Exchange-Traded Notes? 69 iPath S&P 500 VIX Short-Term Futures ETN 70 iPath S&P 500 VIX Mid-Term Futures ETN 73 Comparing the VXX and VXZ Performance 76 Barclays ETN+ Inverse S&P 500 VIX Short-Term Futures ETN 80 Barclays ETN+ S&P VEQTOR ETN 82 S&P 500 VIX Futures Source ETF 82 Chapter 7 Alternate Equity Volatility and Strategy Indexes 83 CBOE S&P 500 3-Month Volatility Index (VXV) 83 VIX Premium Strategy Index (VPD) 88 Capped VIX Premium Strategy Index (VPN) 90 S&P 500 VARB-X Strategy Benchmark 93 S&P 500 Implied Correlation Index 95 Chapter 8 Volatility Indexes on Alternative Assets 99 CBOE Gold Volatility Index 100 CBOE Crude Oil Volatility Index 102 CBOE EuroCurrency Volatility Index 104 CBOE/NYMEX Crude Oil (WTI) Volatility Index 107 CBOE/COMEX Gold Volatility Index 107 CBOE/CBOT Grain Volatility Indexes 109 FX Realized Volatility Indexes 109 Chapter 9 The VIX as a Stock Market Indicator 113 The Inverse Relationship between the VIX and the S&P 500 114 VIX Index as an Indicator 115 VIX Futures as an Indicator 118 A Modified VIX Futures Contract 121 Combining VIX Futures and the VIX Index 122 VIX Index and Gold Price Indicator 124 VIX Option Put-Call Ratio 127 Chapter 10 Hedging with VIX Derivatives 133 Hedging with VIX Options 133 Hedging with VIX Futures 143 University of Massachusetts Study 147 Chapter 11 Speculating with VIX Derivatives 149 VIX Futures Trading 150 VIX Option Trading 153 VIX ETN Trading 161 Comparing VIX Trading Instruments 166 Chapter 12 Calendar Spreads with VIX Futures 169 Comparing VIX Futures Prices 170 The Mechanics of a Calendar Spread 175 Patterns in the Data 178 Trade Management 189 Other Parameters 193 Chapter 13 Calendar Spreads with VIX Options 195 VIX Option Pricing 195 Calendar Spread with Put Options 196 Calendar Spread with Call Options 205 Diagonal Spread with Put Options 209 Diagonal Spread with Call Options 212 Chapter 14 Calendar Spreads with VIX Options and Futures 217 Comparing Options and Futures 217 Calendar Spread Examples 219 Chapter 15 Vertical Spreads with VIX Options 229 Vertical Spread Examples 229 Chapter 16 Iron Condors and Butterflies with VIX Options 251 What is an Iron Condor? 251 Iron Condor with VIX Options 255 What Is an Iron Butterfly? 257 Iron Butterfly with VIX Options 261 About the Author 265 Index 267 Review "For those wanting to take the next step in learning or portfolio modeling, Trading VIX Derivatives will be a logical step in progression. For investors considering trading the VIX in any of many products available I recommend getting a copy of Trading VIX Derivatives with the great return on investment this book offers." (SeekingAlpha, April 2012) Long Description "The ability to trade volatility is the most exciting innovation since financial futures. Russell explains the instruments and the trading strategies in a really well-organized and interesting manner. Best of all, the concepts come with real-world examples, which makes concrete what could otherwise be theoretical concepts. This book is required reading for both experienced and aspiring traders." BEN VAN VLIET, Lecturer, Stuart School of Business, Illinois Institute of Technology "When it comes to trading the VIX there is no better resource than Russell Rhoads. His ability to tear apart this complex product into something that is understandable to the average trader is unmatched. This book is a must read for anyone looking to trade the VIX." MARK SEBASTIAN, Director of Education, Option Pit Mentoring "Russell Rhoads is my go-to guy for all VIX knowledge. After reading his latest book, I came away thinking it was just like having a conversation with him over coffee." JESSICA TITLEBAUM, Senior Vice President and Editor at Large, John J. Lothian & Company, Inc. "Russell Rhoads has done options traders at all levels a favor with his new book, Trading VIX Derivatives . Virtually all options traders are familiar with the VIX, but fewer have traded VIX options and fewer still understand the newer VIX derivatives. Russell clearly explains each product and, more importantly, gives us clear examples of how we can use VIX options and futures to hedge our portfolios and benefit from our volatility predictions. This book will be a valuable addition to the libraries of institutional money managers as well as individual options traders." KERRY W. GIVEN, PhD, author, No-Hype Options Trading , founder; Parkwood Capital, LLC " Trading VIX Derivatives does an outstanding job of explaining simply and clearly what an investor needs to know about this often referenced fear index. Investors who are new to VIX trading will find this a fantastic guide for getting started, while market professionals can utilize it as an invaluable reference tool. This is another great work by Mr. Rhoads." JASON KNOPE, CFA, CMT, Director of Research, Paul Manners & Associates, Inc. Review Text "For those wanting to take the next step in learning or portfolio modeling, Trading VIX Derivatives will be a logical step in progression. For investors considering trading the VIX in any of many products available I recommend getting a copy of Trading VIX Derivatives with the great return on investment this book offers." (SeekingAlpha, April 2012) Review Quote "For those wanting to take the next step in learning or portfolio modeling, Trading VIX Derivatives will be a logical step in progression. For investors considering trading the VIX in any of many products available I recommend getting a copy of Trading VIX Derivatives with the great return on investment this book offers." ( SeekingAlpha , April 2012) Details ISBN0470933089 Series Wiley Trading Year 2011 ISBN-10 0470933089 ISBN-13 9780470933084 Format Hardcover Short Title TRADING VIX DERIVATIVES Language English Media Book Series Number 503 DEWEY 332.6457 Illustrations Yes Pages 288 Edition 1st Subtitle Trading and Hedging Strategies Using VIX Futures, Options, and Exchange-Traded Notes Publisher John Wiley & Sons Inc Imprint John Wiley & Sons Inc Place of Publication New York Country of Publication United States UK Release Date 2011-08-26 AU Release Date 2011-07-20 NZ Release Date 2011-07-20 Author Russell Rhoads Publication Date 2011-08-26 Audience General US Release Date 2011-08-26 We've got this At The Nile, if you're looking for it, we've got it. With fast shipping, low prices, friendly service and well over a million items - you're bound to find what you want, at a price you'll love! TheNile_Item_ID:37142024;

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