Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: ggersh who wrote (41074)	12/1/2012 6:58:52 PM
From: Mr. Aloha	Read Replies (1) \| Respond to of 223195

To drive the VIX you need to trade lots of SPX options, but what would the purpose of that be? What would a higher or lower VIX do for the government? It's much easier and more direct to trade SP futures with lots of leverage to drive the market up or down. No, most commodities are settled by delivery. The index futures are settled by cash, but they still pretty directly affect the market because traders, including lots of arbitrage traders, react quickly to any discrepancies in stock index futures vs. the underlying index. You don't have the huge number of VIX futures traders to do that like you do for the index futures. The VIX futures and ETF's can be pushed around -- if you watch them they'll trade at pretty widely varying premium and discount to the underlying VIX during the day. It's the underlying VIX index that isn't pushed around by the VIX futures and ETF's -- the VIX isn't a product -- it's an index that is calculated based on SPX options.