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I have to say, that, your videos are far better than any other financial videos on UA-cam. I am impressed by the way you present the information and how you walk the viewer through the technical formulas. Well done, and please make more videos. Thank you.
Wow, thank you so much for the comment! I appreciate the feedback and I'm glad you feel I've succeeded at explaining things in this video. Be sure to subscribe and stay tuned for more videos! -Chris
The vix index is a gross volatile market, one can’t be too sure of his entry, that’s why I explain how to earn in real time, and help navigate you to financial freedom
You not just a trader, who gives instructions you lend a guiding hands all through and that is why I live your message about commitment to the trade and also commitment to humanity
Great !! Video, Very Precisely, Illustrated, Broken Down & Explained, I Really Appreciated This & Learned Alot About The ( Vix Index ): In A Very Short Time
If VIX is 30-day implied volatility, then to get an annualized expected change in the S&P, shouldn’t you use the last 12 months of VIX numbers to find an average and then use that to determine the expected 1-year $ move?
Is the 68% probability figure used for all SPX/VIX cases or just the SPX 2000/VIX at 50 example used? If the latter, what is the formula to calculate the 68% probability?
Vix is just a weighted measure of IV of stocks in consideration. Its a statistical term has no relation with the no. of stocks in the index. So 68% probability goes for all the stocks, indexes, etc.
In another vedio u said that option prices drive implied volatility and IV then drive stock prices now u saying other way around which one is it .I'm not trying to call u out I'm confused bother explaining pls
Historical VIX Levels Percentile(Bellow) 1990 to present. 90% below 28.9475% below 23.0550% below 17.8225% below 14.0210% below 12.22 How could I go about finding the same statistics but in different time spans? Let's say I would like to know how big % VIX has been below 15 from 2019-2020. Are there any good indicators or tools to do this for me?
Don't get one thing. How can VIX be lower when market rises in a steep way? After all, VIX is dependent on option prices. And a steep rise in market will also increase option prices, which shall increase VIX too. In your VIX vs S&P 500 chart also, VIX was high when the S&P 500 made a V-shaped recovery. So why do you say a rising market calls for lower VIX?
Great question and I don't know the answer for sure. My best guess would be that its an industry standard to discuss volatility in the context of one year. In other words, volatility measures are typically annualized before being presented/compared to one another. I hope this helps. -Chris
@@borets42 Thanks for this video. Dividing the VIX by the sq root of 12 will give the expected 30 day IV % move. Could you explain why the VIX is "$1500" though? Dollars? Cheers.
So options are just more expensive when the vix is high and cheaper when the vix is low?And is it better to trade options when the vix is high or low or does it just come down to cost?
Yes, precisely. The expensive option prices are what cause the VIX to be high. When SPX options are very cheap, it causes the VIX to be low. SPX option prices / the VIX are influenced by the actual volatility in the market. When the market becomes more volatile, SPX options become more expensive due to increased demand and lower supply at cheap prices. This causes the VIX to rise. The opposite is true when the market becomes less volatile.
The VIX measures SPX options specifically. But when the S&P 500 volatility is high, that means individual stocks are highly volatile, which means the options on those individual stocks are expensive too (high implied vol). And remember -- SPX option prices drive the VIX, not the other way around.
Yes, VIX measures SPX options with around 30 days to expiration. It uses call options and put options in the calculation, so the VIX Index does include call prices.
✅ New to options trading? Master the essential options trading concepts with the FREE Options Trading for Beginners PDF and email course: geni.us/options-trading-pdf
I have to say, that, your videos are far better than any other financial videos on UA-cam. I am impressed by the way you present the information and how you walk the viewer through the technical formulas. Well done, and please make more videos. Thank you.
Wow, thank you so much for the comment! I appreciate the feedback and I'm glad you feel I've succeeded at explaining things in this video.
Be sure to subscribe and stay tuned for more videos!
-Chris
Well done, again you made me understand VIX index within 23 minutes. Very impressive! Thanks a lot.
The vix index is a gross volatile market, one can’t be too sure of his entry, that’s why I explain how to earn in real time, and help navigate you to financial freedom
Yes I am a big fan alice thank you for all you do, you have changed my life through your expert guidance program
Anyway you can mentor me on the VIX market?
Best in the game no one competes with you alice
You not just a trader, who gives instructions you lend a guiding hands all through and that is why I live your message about commitment to the trade and also commitment to humanity
Reachng out to all who do not just want to invest but learn the trade
Good video. I like your clear, methodical approach to explaining finance matters.
My friend asked to look at this, I must say. I am impressed. Thank you.
Josue,
Thanks for the kind words! I'm glad you enjoyed the video!
-Chris
Great !! Video, Very Precisely, Illustrated, Broken Down & Explained, I Really Appreciated This & Learned Alot About The ( Vix Index ): In A Very Short Time
I honestly need to understand option trading...
Been reading the book called index trading course .
curiousity lead me to your channel
very well explained... complex concepts laid out clearly ... good work
Thank you.
If VIX is 30-day implied volatility, then to get an annualized expected change in the S&P, shouldn’t you use the last 12 months of VIX numbers to find an average and then use that to determine the expected 1-year $ move?
If the market is booming, wouldn’t call prices start becoming expensive, causing the vix to rise too?
Brilliant explanation
Great video Chris!
Great video man loved the explanation...doubts I had are gone now
Thanks so much! I'm glad this video helped.
I wish I paid attention during maths call .. are you still responding to comments in this vid ?
Is the 68% probability figure used for all SPX/VIX cases or just the SPX 2000/VIX at 50 example used? If the latter, what is the formula to calculate the 68% probability?
Vix is just a weighted measure of IV of stocks in consideration. Its a statistical term has no relation with the no. of stocks in the index.
So 68% probability goes for all the stocks, indexes, etc.
In another vedio u said that option prices drive implied volatility and IV then drive stock prices now u saying other way around which one is it .I'm not trying to call u out I'm confused bother explaining pls
Is this the same as vix 75?
Well done. Thank you
You're welcome and thank you for the comment!
Historical VIX Levels Percentile(Bellow) 1990 to present. 90% below 28.9475% below 23.0550% below 17.8225% below 14.0210% below 12.22 How could I go about finding the same statistics but in different time spans? Let's say I would like to know how big % VIX has been below 15 from 2019-2020. Are there any good indicators or tools to do this for me?
Find the dAily vix values from 2019- 2020 and find the % of the time it has been below 15
Where did u learn all of this?
Well explanations. Thank you.
Don't get one thing. How can VIX be lower when market rises in a steep way? After all, VIX is dependent on option prices. And a steep rise in market will also increase option prices, which shall increase VIX too.
In your VIX vs S&P 500 chart also, VIX was high when the S&P 500 made a V-shaped recovery.
So why do you say a rising market calls for lower VIX?
Think about VIX as expected move or potential to risk or potential interest. If a move is expected then it'll still be lower.
@@7xr1e20ln8 Not getting your point. If you could explain mathematically, please.
Can you please explain why VIX represents a one-year range and not a 30-day range since we're using 30-day options to calculate it?
Great question and I don't know the answer for sure.
My best guess would be that its an industry standard to discuss volatility in the context of one year. In other words, volatility measures are typically annualized before being presented/compared to one another.
I hope this helps.
-Chris
@@projectfinance Thank you for responding Chris. It makes sense. Using annualized values makes life much easier.
It's one year because option prices are derived from the Black Scholes formula that uses a 1 year risk free rate (UST's).
@@borets42 Thanks for this video. Dividing the VIX by the sq root of 12 will give the expected 30 day IV % move.
Could you explain why the VIX is "$1500" though? Dollars? Cheers.
Theoretically you could construct your own VIX index, weighting the IV of every expiration up to 1 year out to get a true yearly VIX
fantastic dude
So options are just more expensive when the vix is high and cheaper when the vix is low?And is it better to trade options when the vix is high or low or does it just come down to cost?
Yes, precisely. The expensive option prices are what cause the VIX to be high. When SPX options are very cheap, it causes the VIX to be low.
SPX option prices / the VIX are influenced by the actual volatility in the market. When the market becomes more volatile, SPX options become more expensive due to increased demand and lower supply at cheap prices. This causes the VIX to rise. The opposite is true when the market becomes less volatile.
@@projectfinance so it affects the prices of ALL optiions in general when the vix goes higher and not just SPX options?
The VIX measures SPX options specifically. But when the S&P 500 volatility is high, that means individual stocks are highly volatile, which means the options on those individual stocks are expensive too (high implied vol).
And remember -- SPX option prices drive the VIX, not the other way around.
what happens when index falls and also VIX falls. From here onwards
does market rises or falls into a range.
Great content
Great video thank you for this!
You're welcome! Thanks for the comment!
legend.
So when VIX is high,even call options getting more expensive?
Yes, VIX measures SPX options with around 30 days to expiration. It uses call options and put options in the calculation, so the VIX Index does include call prices.
@@projectfinance Thank you!
wow
thank you sir