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Posted: 6/7/2022 8:14:34 AM EDT
The cboe has a pretty good spike up today. If my understanding is correct this means another bad day for the market based on futures. Is this correct?
Link Posted: 6/7/2022 10:37:59 AM EDT
[#1]
Straight from the horse's mouth:

https://www.cboe.com/tradable_products/vix/

Link Posted: 6/7/2022 12:28:01 PM EDT
[#2]
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Quoted:
Straight from the horse's mouth:

https://www.cboe.com/tradable_products/vix/

View Quote


Yes, have been over that. I guess what I’m looking for is how to use the information. The last data point on their graph is 6/3. The live graph seems to be useless as it basically mirrors the market although @15 min lag. So I guess what I’m searching for is how to use the information.

This morning it spiked just under 2 pts. Being futures driven, does this affect todays market  or some point in the future. Maybe a trend over (x) number of days? There hasn’t been much of a swing over the last week or so but the market seems pretty volatile in my novice eye.
Link Posted: 6/7/2022 4:03:21 PM EDT
[#3]
Quoted:
The cboe has a pretty good spike up today. If my understanding is correct this means another bad day for the market based on futures. Is this correct?
View Quote


Does this description from Wikipedia help you?


VIX is a volatility index derived from S&P 500 options for the 30 days following the measurement date, with the price of each option representing the market's expectation of 30-day forward-looking volatility. The resulting VIX index formulation provides a measure of expected market volatility on which expectations of further stock market volatility in the near future might be based.
View Quote


To answer your question, not really. Futures on stocks (equity) are highly correlated to the equity price and vice versa.

VIX is related to the options, and options have implied volatility. Volatility does not mean the stocks are going to down; volatility is change - either up or down or both.

Also, when futures on stocks start trading on Sunday, that IS the market, not a predictor of the market.

Professional trading shops like Ronin Capital have gone out of business trading the VIX. You shouldn't try to trade it unless you know exactly why you want to and what your trading objectives and stop-loss and profit-exit strategies are.

Link Posted: 6/7/2022 4:43:49 PM EDT
[#4]
Link Posted: 6/8/2022 12:26:39 AM EDT
[#5]
Thanks for the help. I have no intention of using this information for some knucklehead strategy. I don’t have the knowledge to even attempt it. Basically was trying to get a handle on whether it would tell me to keep my eye on the market for the day as I am trying to slow down dca unless a position was down at least 10% or more. Trying to do this at %5% was eating up the cash quicker than I wanted it to.

It looks like most big sell off days the vix was above 30 to 35 but since this is futures I doubt the info would be of any use on the day. Besides, going back in forth in such small increments lead me to believe most folks have no better idea of what is going to happen than the next guy.

Thanks again..

ETA: Or..after reading the consumer credit numbers that tooter posted, I think I will keep the cash in something a little safer..
Link Posted: 6/8/2022 1:29:13 PM EDT
[#6]
If you want to try to get some idea of whether VIX is a leading or lagging indicator for some other thing you're trying to trade, plot them both on the same chart with the same time x-axis and see what happens to the thing you're interested in trading when VIX spikes or drops.

Might also want to look at the second derivative of VIX, the change in the change (the slope), to see if that gives you some indicator of an inflection somewhere else.
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