Spread betting on market volatility using the VIX

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The VIX is a contract traded on the CBOE that measures volatility in the market.  The price is dependent on how much the price of the S&P 500 moves and has been around since 1993.

It’s no secret that most spread betting clients make money when the market is moving one way or another.  It is the basic principle of trend.  If there is one it is easier to follow and therefore make money.  So the VIX provides a visualisation of how easy it is to make money, it is also a fairly predictable indicator.

You can either trade the VIX through futures contracts on the CBOE market of by placing a bet through a spread betting broker.

The market moves through cycles of volatility and activity and boring non movement.  These movements were traded by options contract strategies, but since 2004 when the VIX futures was introduce anyone can have a go.  A good indicator to keep an eye on.

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