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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: ggersh who wrote (41070)	12/1/2012 6:00:30 PM
From: Mr. Aloha	1 Recommendation Read Replies (1) \| Respond to of 223156

VIX futures isn't specifically trading the VIX. I've traded them quite a bit, and they trade at a premium or discount to the actual VIX index, which is calculated based on SPX call and put options -- not based on VIX futures trading. You can't drive the VIX up and down by buying or selling VIX futures like you can with other futures -- you just can push the VIX futures to more of a premium or discount, which can fluctuate pretty widely. They're cash settled, so you don't get anything delivered at expiration like you do with commodities. I was kind of joking about government workers not being able to figure it out, but it's not like gold futures or S&P futures where you can affect the trading pretty directly by buying or selling. It's much easier, more direct, and more effective for the government to manipulate the market by trading S&P futures rather than VIX futures. Why would they try to manipulate the VIX instead of the S&P? cfe.cboe.com "The CBOE Volatility Index is based on real-time prices of options on the S&P 500 Index, listed on the Chicago Board Options Exchange (Symbol: SPX), and is designed to reflect investors' consensus view of future (30-day) expected stock market volatility."