Average daily volume for the new VIX® Weeklys options was a strong 25,042 contracts in October, the first month of trading for the products. Prior to last month, the VIX options had expirations only once a month, but now with VIX Weeklys options there usually are VIX options expirations in at least the first four weeks.
VIX OPTIONS CHAIN
A key feature of the new VIX Weeklys options is that they are in the same options chain as the standard-expiration VIX options. This screenshot below from Bloomberg (after the close on November 2) shows that there now are VIX options expirations on Nov. 4, Nov. 11, Nov. 18, and Nov. 24 (in addition, there are VIX options with longer-dated expirations).
MORE PRECISION AND RESPONSIVENESS
The addition of weekly expirations to standard monthly futures and options expirations offers volatility exposures that more precisely track the performance of the VIX Index. The closer VIX futures and options are to expiration, the more closely they generally track the VIX Index. By ‘filling the gaps’ between monthly expirations, investors may obtain new opportunities to establish short-term VIX positions, and fine-tune the timing of their hedging and trading activities.
The chart below shows select VIX futures in August. The week 34 VIX Weekly futures settled on the morning of Wednesday, August 26. As noted in the subheading, over a 3-day period the VIX Index rose 167% and the week 34 VIX Weekly futures rose 147% (while the standard-expiration VIX futures had smaller moves).
To learn more about VIX Weeklys futures and options, please visit www.cboe.com/VIXWeeklys.