So there is a lot of misinformation out there surrounding the VIX and VIX trading productsincluding futures and ETNs.

When it comes to trading the VIX, nothing moves quite like you think it should. You cannot buy and sell the actual VIX.

Trading the VIX - 8 VIX Trading Myths Debunked | InvestorPlace

You can buy and sell VIX futures, but that is a very different thing. VIX futures can trade at premiums or discounts to the VIX. In fact, they almost always trade at premiums to the VIX.

VIX futures cash out when they expire based on a VIX settlement price. So unless you roll out, your position will vanish.

Weekly VIX options the newest way to trade volatility | Reuters

VIX futures price based on where the market expects to see the VIX on a given date in the future, i. That estimate may or may not move on a given day with a move in the VIX.

The further out in time the future is, the less it will track VIX moves. VXX is an exchange-traded note that is based on a hypothetical rolling day VIX future where to trade vix options trades like a where to trade vix options stock. However, it does not track VIX moves particularly well.

In fact, it underperforms over time so long as VIX futures trade in an upwardly sloped term structure.

And VIX futures virtually always trade that way. Article printed from InvestorPlace Media, typing from home jobs northern ireland Financial Market Data powered by FinancialContent Services, Inc.

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