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Options on VIX Futures

A New Dimension
in Volatility Trading

Options on VIX® Futures may provide opportunities to execute volatility trading strategies with greater precision and shorter-term exposure.

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Contract Specifications
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FAQ

What are Options on VIX® Futures?

Options on Cboe Volatility Index® (VIX® Index) Futures offer more choices to express directional views and manage equity market volatility exposure. These new, innovative contracts provide optionality into front month VIX futures, are physically settled, and trade on Cboe Futures Exchange, LLC.

Key Benefits

New, Unique Risk Exposure

Access a new and different payout profile than what is currently available in the volatility space.

Targeted Volatility Trading

Manage exposure with greater granularity and execute event-specific trading strategies.

Efficient Delta Management

In-the-money options are settled into the front month VIX futures contract which enables more precise delta management.

Expanded Market Access

Listed on a futures exchange which opens doors for market participants unable to trade in securities products.

Vendor Trading Symbols - Options on VIX Futures

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PlatformRoot Symbol
BloombergUXEA Index OMON
ICE DataO:UX
LiveVolUX
RefinitivO#VXW+
SilexxUX
Trading TechnologiesVX

Options On Cboe Volatility Index® Futures Use Cases

Client:

CTA (Commodity Trading Advisor) Fund

Challenge:

Accessing optionality for pure volatility positions related to the Cboe Volatility Index® (VIX® Index).

Background:

CTAs run managed futures strategies, both systematic and discretionary, but are constrained to using futures-based instruments. This use case looks at a CTA fund that is looking to access optionality in the equity volatility space.

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Client:

Market Maker

Challenge:

In recent years, SPX options market makers have acted as liquidity providers for daily expiring SPX options. The trading activity in these SPX options reflects the appetite from market participants for more granular expiries within the options landscape, which, in turn, increases the demand from market makers for more granular expires in the VIX® suite of products.

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Client:

Volatility Hedge Fund/Systematic Portfolio Manager

Challenge:

Periodically, event driven catalysts provide dislocations in the volatility term structure. Such dislocations can occur with respect to the front end of the term structure, such as if investors overreact to current events, which, in turn, may provide an opportunity to monetize a normalization in forward volatility. In situations in which the fund desires optionality, whether it be because the fund either wishes to lever its position or has a relatively low to moderate level of conviction, the fund currently may be limited to utilizing calendar spreads constructed using Cboe Volatility Index® (VIX®) options.

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Key Resources

Explore specifications and other materials for optimal use of Options on VIX Futures.

Contract Specifications